Britannia's Q3 revenues may rise up to 20% YoY on higher volumes: Analysts

FMCG major Britannia Industries is likely to clock up to 20 per cent year-on-year (YoY) revenue growth to Rs 4,041 crore in Q3FY23, buoyed by 4-5 per cent growth in volumes, estimated analysts. The biscuit maker reported revenues at Rs 3,531 crore, in the year-ago quarter. The company is scheduled to announce results on Wednesday, February 1.

According to brokerage estimates, analysts expect Britannia to report stable margins, expanding up to 87 basis points (bps) YoY to 16.2 per cent in Q3FY23, owing to fall in raw material prices and price hikes undertaken. However, it is likely to decline up to 25 bps sequentially from 16.4 per cent in Q2FY23. Profit-after-tax (PAT), on the other hand, is likely to grow 23 per cent YoY to Rs 440 crore, during the quarter.

On the bourses, Britannia outperformed peers as shares surged 12 per cent in Q3FY23, whereas peers like Hindustan Unilever (HUL), Dabur India, ITC, and Tata Consumer declined up to 5 per cent, during the same period. In comparison, the S&P BSE FMCG index slipped 0.64 per cent in Q3FY23.

Here are top brokerage estimates for Britannia’s Q3FY23 results:

Axis Securities

The brokerage firm estimates the FMCG major to clock 14 per cent YoY revenue growth to Rs 4,115 crore, on the back of expansion in distribution reach and market share gains. However, analysts remain cautious over rural weakness that could potentially dent overall revenues. The fall in input prices, analysts said, are likely to expand gross margins 160 bps YoY, which will lead to Ebitda margin expansion of 80 bps YoY in Q3FY23.

Motilal Oswal

Analysts expect 7 per cent volume growth in base business in Q3FY23. While price increases will help operating margins, analysts said that they will keenly watch out management’s commentary on raw material price outlook. Ebitda margins, on the other hand, is expected to grow to 16.1 per cent in Q3FY23 from 15.1 per cent in Q3FY22. The brokerage firm remains ‘neutral’ on the counter, sharing a target price of Rs 4,280 per share.

Phillip Capital

Mid-single digit volume growth owing to market share gains, increasing distribution network is likely to help clock revenues 17.6 per cent YoY to Rs 4,152 crore in Q3FY23, however, will decline 4.3 per cent QoQ from Rs 4,337 crore in Q2FY23. Gross margins, analysts said, are likely to expand 139 bps YoY to 38.5 per cent in Q3FY23 owing to improving salience from premium products and price hikes. EBITDA margins, too, are expected to grow 87 bps YoY to 16.2 per cent in Q3FY23.

Sharekhan

Analysts expect PAT to grow 23 per cent YoY to Rs 440 crore in Q3FY23, in-line with 22 per cent YoY increase in operating profit. However, margins are expected to remain stable YoY as increased raw material prices will be mitigated by price hikes undertaken. Revenue, on the other hand, is likely to grow 20 per cent YoY to Rs 4,041 crore in Q3FY23, with volume growth of 4-5 per cent and price-led growth of 15 per cent.