Estimates given by five brokerages have pegged the Q3FY25 topline in the range of Rs 4,404 crore and Rs 4,485 crore.
The company’s net profit for the reporting quarter is seen to fall between 5.4% and 8% over the October-December quarter of FY24.
The highest revenue estimate is given by HDFC Securities while JM remains most conservative among its peers. As for the profit after tax (PAT), Kotak Institutional Equities sees the biggest decline while Axis Securities sees the shallowest net profit decline.
Investors should watch out for the company’s guidance on the urban/rural demand environment, raw material cost outlook and competition in this space.
Britannia will announce its Q3 earnings on Thursday, February 6, 2025. Here’s what brokerages recommended:
Axis Securities
Britannia Industries is expected to report a revenue growth of 5.5% on a YoY basis to Rs 4,492 crore. On a sequential basis, it could fall by 3.8%. The PAT is pegged at Rs 526 crore which could likely be a downfall of 5.4 YoY and 1% on a QoQ basis.
The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) is seen at Rs 778 crore, which could fall 5.3% over Q3FY24 while reporting a loss of 1% over Q2FY25 on account of high inflation and weak operating leverage. The EBITDA margin is seen around 17.3%, which is a likely 198 bps YoY downtick and a 53 bps QoQ gain.
Britannia’s volume is likely to see a 5% growth in Q3FY25 versus 7/8% in Q1/Q2.
The earnings will be impacted by price hikes and anniversarisation of price cuts taken last year, this report suggested.
Key monitorables are urban/rural demand environment, raw material cost outlook and market share trends.
JM Financial
JM Financial has estimated the company’s Q3 revenue at Rs 4,404 crore, which is expected to go up 5.1% on a YoY basis. Meanwhile, PAT on an adjusted basis may see a 7.6% YoY fall to Rs 516 crore.
EBITDA is seen around 760 crore, which is a 7.5% fall on a YoY basis. EBITDA margin may drop by 234 points to 17.3%.
JM forecasts 4% volume growth, which is lower versus H1 owing to grammage cuts. Pricing may turn positive. Higher input costs and lack of operating leverage is likely to result in an EBITDA decline on a YoY basis, this brokerage said.
Kotak Equities
Kotak Equities sees Q3 PAT at Rs 4,477 crore, which could go up by 5.2% YoY and down 4.1% QoQ. Net income is pegged at Rs 515 crore, down by 8% YoY and 3% QoQ.
EBITDA may see a downfall of 7% on a YoY basis and 2.6% on a QoQ basis to Rs 763 crore impacted by RM inflation and adverse operating leverage. Meanwhile, the EBITDA margin for the reporting quarter may be at 17%, declining by 225 bps over Q3FY24 while rising by 26 bps over Q2FY25.
“We model 5% YoY growth in biscuit volumes versus 8% each in 1Q/2Q, impacted by price hikes and subdued consumption environment. We build -0.5% YoY price-mix versus negative 3-4% in prior two quarters, due to anniversarisation of price cuts taken last year and factoring in inflation-led price hikes (2-3%) taken in the current quarter,” Kotak said in a preview note.
“We expect consolidated GM to [contract 210 bps YoY to 41.8% (versus 135 bps YoY decline in 2Q), impacted by continued RM inflation (particularly in edible oils). Price increase is lagging RM inflation as companies were hopeful of a reversal of the import duty hike on palm oil imposed earlier this year.
“Employee cost is expected to decline both QoQ/YoY due to high base (2Q had a one-off impact of Rs 500 million due to phantom stocks,” this brokerage said.
HDFC Securities
Net sales may rise by 7% YoY while declining by 1.8% QoQ to Rs 4,485 crore while the adjusted PAT could be reported at Rs 524 crore, down by 6.3% YoY and 1.5% QoQ.
EBITDA may be reported at Rs 784 crore, witnessing a 4.5% fall on a YoY basis while remaining flat on a QoQ basis. The EBITDA margin may decline by 210 bps YoY to Rs 17.5% while rising sequentially by 33 bps.
The company’s gross margin is expected to remain under pressure owing to a sharp surge in key RM’s (wheat, palm oil and milk).
“EBITDA margin to see significant contraction despite strong vol growth owing to price correction as well as brand equity investments,” HDFC Securities reasoned.
Volume growth is seen at 7% YoY.
High single-digit volume growth is seen as benefits of grammage increase, split route adopted for each main category along with distribution expansion will show.
Also Read: Trent Q3 preview: 38-40% YoY revenue uptick seen aided by store additions
Motilal Oswal
MOFSL expects a 7% revenue growth YoY, primarily led by volume growth of 5% in 3QFY25. Britannia has taken 2-3% price hike in some of its products during the quarter to offset commodity price inflation.
“GP margin expected to decline 190 bp YoY to 42% and EBITDA margin expected to decline 160 bps YoY to 17.7% due to rise in agri commodity prices. BRIT focuses on innovation and distribution channels to gain market share,” this brokerage said.
MOFSL has a neutral rating on the stock.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
