Britannia Q2 preview: Here's how analysts' expect Britannia to fare in Q2

Apart from the FMCG giant's September quarter performance, analysts and investors will keep an eye on the company's rural demand environment, raw material cost outlook, and market share trends

Biscuit maker--known for its brands like bourbon, tiger, and milk bikis-- is expected to come out with its second quarter (Q2FY25) results on Monday, November 11, 2024.

 

Brokerages tracked by Business Standard estimate Britannia's profit after tax (PAT) for the quarter ended September 30, 2024, at an average of Rs 604.76, an increase of 2.85 per cent as compared to Rs 588 crore a year ago. On a quarterly basis, the PAT is expected to grow at an average of 19.5 per cent.

 

The company's topline is estimated to grow by 7.62 per cent year-on-year (Y-o-Y) at an average to Rs 4,703.16 crore as compared to Rs 4,370 crore a year ago. The growth will be on the backdrop of improving rural trends, and price cuts. On a quarter-on-quarter (Q-o-Q) basis, revenue is forecasted to grow 13.87 per cent.

 

 

Analysts and investors will keep an eye on the rural demand environment, raw material cost outlook, and market share trends.

Here's how analysts of various brokerages expect Britannia to perform in Q2:

Axis Securities: Axis analysts expect Britannia to report 7 per cent Y-o-Y revenue growth, along with 9 per cent volume growth Y-o-Y.

 

The brokerage forecasts the overall revenue at Rs 4,668 crore as compared to Rs 4,370 crore a year ago.

 

The Earnings before interest, tax, depreciation, and amortisation (Ebitda) margin is likely to contract on account of higher raw material and ad spending.

 

They peg Ebitda margins at 19.4 per cent as compared to 20 per cent a year ago.

 

Kotak Institutional Equities: Kotak analysts estimate 9 per cent Y-o-Y growth in biscuit volume owing to improving rural performance and continued positive growth momentum witnessed over the past few quarters.

 

They build a -2.8 per cent Y-o-Y price-mix impact, as price cuts taken last year will continue to impact value growth for the current quarter as well, resulting in 6.3 per cent Y-o-Y growth in standalone net revenues.

 

Price mix or pricing strategy, is a business strategy that involves the combination of pricing tactics, strategies, and elements to set and adjust prices.

 

The overall revenue is expected to come at Rs 4,743.8 crore as compared to Rs 4,432.9 crore Y-o-Y. The consolidated revenue is expected to grow at 7 per cent Y-o-Y.  

 

Analysts expect consolidated gross margin to contract 80 basis points (bps) sequentially to 42.6 per cent, partly impacted by raw material inflation, especially in palm oil.

 

The Ebitda margin is estimated to expand 25 bps sequentially to 18 per cent as compared to 17.7 per cent in Q1FY25 led by operating leverage and cost efficiencies.

 

However, on a Y-o-Y basis, the Ebitda margin is expected to contract by 171 bps.

 

Nuvama Institutional Equities: The brokerage expects revenue to grow 6 per cent Y-o-Y and volume to grow 8 per cent Y-o-Y as compared to 1.2 per cent revenue and 0.2 per cent volume growth in Q2FY24.  

 

They anticipate Ebitda to decline 3.3 per cent Y-o-Y as compared to 22.6 per cent growth in Q2FY24 and 9.4 per cent growth in Q1FY25.

 

The gross margin is expected to slip 7 bps to 42 per cent and Ebitda margin is likely to decline 173 bps Y-o-Y to 18 per cent owing to the high base.