Britannia Q1 Review - Operating Profits Miss Estimates, Rural Revival Seen; Maintain Buy: Axis Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.Britannia Industries Ltd.'s revenue grew by 4% YoY, slightly below our estimates. Revenue growth was driven by high single-digit volume growth (~7% YoY) and price cuts. Gross margins improved to 41.8% (versus our estimate of 43.5%), impacted by the increase in commodity prices (excluding palm oil and laminates). Ebitda margins stood at 17.7% (missed our estimate), up 56 basis points, due to higher raw material prices and increased ad spends. Adjusted profit after tax stood at Rs 506 crore, up 10.5% YoY. .We expect Britannia to deliver market-leading growth from here on for several reasons:Rural recovery continues to remain a focus area for Britannia, leveraging which it is building strong rural distribution and gaining market share in focused states. Moreover, rural revival is anticipated in the coming quarters, supported by better monsoon and higher government spending, Britannia’s robust portfolio planning through new product development in core and adjacent categories, along with its focus on increasing direct reach, rural penetration, RTM 2.0, and a higher share of in-house manufacturing, will enhance overall efficiency. The management expects raw material prices, though currently firm (wheat and sugar), to experience ~3% inflation, which is manageable. We believe that these factors will strengthen Britannia in the mid/long run. .Click on the attachment to read the full report:.Britannia Industries Q1 Results Review - Prioritising Volume Growth Over Margins: Yes Securities.DISCLAIMERThis 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.

Britannia Q1 Review - Operating Profits Miss Estimates, Rural Revival Seen; Maintain Buy: Axis Securities

The brokerage expects the fmcg major to deliver market-leading growth from here on, and the company's long term story remains intact.

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Britannia Q1 Review - Operating Profits Miss Estimates, Rural Revival Seen; Maintain Buy: Axis Securities

The brokerage expects the fmcg major to deliver market-leading growth from here on, and the company's long term story remains intact.

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