Britannia Q1 revenue may rise up to 15% YoY; 2% dip in PAT seen: Analysts

Britannia Industries Q1 preview: Analysts, on average, expect the company to post a 2 per cent drop in core profit-after-tax (PAT) to Rs 378 crore in Q1FY23 from Rs 387 crore in the year-ago period.

Britannia Q1 preview: Biscuit-maker Britannia Industries is expected to clock revenue growth in the range of 7 per cent to 15 per cent year-on-year (YoY) to Rs 3,839 crore in June quarter (Q1FY23), said analysts. The FMCG major had reported revenues at Rs 3,403 crore in the corresponding quarter of previous fiscal (Q1FY22). Britannia is slated to report their June quarter results on Thursday, August 4.

Analysts, on average, expect the company to post a 2 per cent drop in core profit-after-tax (PAT) to Rs 378 crore in Q1FY23 from Rs 387 crore in the year-ago period. That apart, commodity inflation, de-growth in consumption picture, and weak rural demand sentiment is expected to weigh the margin.

At the bourses, Britannia Industries surged over 5 per cent this year, shows ACE Equity data. Peers like Hindustan Unilever have soared over 11 per cent, whereas Nestle India declined over 1 per cent, during the same period. In comparison, the Nifty FMCG index has zoomed over 13 per cent in 2022.

Factors to watch out for
 

Investors will closely monitor the management's commentary on demand environment for FY23, market share trends, update on core biscuits portfolio, distribution expansion and inter-corporate deposits.

Here's a list of what top brokerage houses estimate for Britannia Industries in Q1FY23:

Edelweiss Securities: The brokerage firm pegs biscuit maker's revenues to rise 7 per cent YoY to Rs 3,631 crore in Q1FY23 from Rs 3,403 crore in the year ago period. Sequentially, the company is expected to report a 2 per cent rise in revenues from Rs 3,550 crore in Q4FY22. However, core PAT is expected to drop 2 per cent YoY to Rs 378 crore from Rs 387 crore in Q1FY22. Analysts expect consumption de-growth in the quarter under view due to subdued rural demand after price hikes.

Kotak Institutional Equities: Analysts expect 13 per cent YoY rise in net sales to Rs 3,847 crore in Q1FY23 from Rs 3,403 in the year-ago period, on the back of new launches. Adjusted PAT, meanwhile, is expected to climb 10.7 per cent YoY to Rs 431 crore in Q1FY23 from Rs 389 in the year ago period.

Axis Securities: The brokerage firm models 15.4 per cent YoY growth in revenue to Rs 3,869 crore in Q1FY23 from Rs 3,352 crore, a year ago, on the back of new product launches and continued distribution expansion. However, rise in costs of agri-commodities and packaging costs would dent Britannia’s Ebitda margin by 25 bps YoY to 16.3 per cent from 16.5 per cent.

Motilal Oswal: Analysts expect Britannia to report 10.5 per cent growth in net sales to Rs 3,700 crore in Q1FY23 driven by 4 per cent volume growth in base business. Adjusted PAT, however, is estimated to dip 2.6 per cent to Rs 300 crore in Q1FY23. Meanwhile, they have retained a 'buy' stance on the counter with a target price of Rs 4,300 per share.

Sharekhan: The brokerage firm forecasts Britannia's sales to grow 12.5 per cent YoY to Rs 3,829 crore in Q1FY23 led by 5 per cent volume growth and 7 to 8 per cent price-led growth. Gross margin and operating profit margin is likely to be lower 219 bps and 123 bps YoY, respectively due to rise in vegetable oil and wheat prices. However, operating profit growth of 4 per cent YoY to Rs 394 crore in Q1FY23 will be set off by lower other income.