Britannia Q1 Results Review - Volumes Recover With Share Gains; Margins Could Remain Range-Bound: Systematix

Systematix Research Report

While Britannia Industries Ltd. delivered in-line Q1 FY25 results with sales/ revenue/ volume (our estimate) growth of 4%/6%/8% YoY, management is optimistic of stronger volume performance in coming quarters (double-digit growth seen by end-Q1).

Demand recovery in rural markets was a key contributor, as Britannia gained higher market share in rural regions. However, performance in key focus states (Hindi heartland) was below expectations due to-

1. demand as-yet recovering from high inflation, and

2. downtrading to cheaper alternatives.

Britannia continues to see higher growth in these markets (1.5 times of overall) and is gradually gaining market share here (c.18% now), but continues to trail the leader (three times Britannia’s share).

The company’s new go-to-market strategy (RTM 2.0) to extract more value from high-potential urban outlets with higher feet-on-street is gaining pace, and rural/direct distribution expansion continues.

While the core biscuits’ growth was low, growth in adjacencies (bread, cake, rusk) is picking up, with dairy sales run-rate of Rs 7 billion.

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