Britannia Industries Q1 Results Review - Prioritising Volume Growth Over Margins: Yes Securities

Yes Securities Report

Britannia Industries Ltd.'s Q1 FY25 volumes were exactly in-line with our estimate but margin came in lower than anticipated. Volume growth came in at ~8% YoY with rural markets doing better. Towards the end of Q1 FY25, Britannia witnessed double-digit volume growth which augurs well for Q2 FY25 but negative realizations will stay for atleast one more quarter.

High operating income led to minor beat on topline, but sharper QoQ gross margin contraction (down 150 basis points QoQ) led to operating miss for the quarter. Advertising and promotion was also higher for the quarter YoY, which supported volume growth in a quarter where focused states/Hindi belt growth was below average.

Going ahead, as expected, volume growth momentum will improve in rest of FY25. We also expect Britannia to maintain current margin while not holding back on spends.

We maintain our Add with a revised target price of Rs 6,300 (Rs 5,570 earlier), targeting ~50 times on Sep’26E earnings per share.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.