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Britannia Industries Ltd.’s revenue growth of 9% YoY was below our (and consensus) estimates as volumes largely remained flattish with correction in pricing.
Resurgence of local competition with pricing correction means growth has to be largely driven by volumes which could lag due to channel de-stocking and outperformance of local players.
Britannia’s gross margin and Ebitda margin normalised, contracting by 300 basis points YoY and 270 bps QoQ to 41.9% and 17.2%, largely due to some pricing correction and benefits of strategic raw material buying getting over. It continues to drive
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distribution expansion and
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strong performance in rural markets and focus states.
Going forward, success of (at least a few) new segments and ramp-up of adjacent categories is imperative. Maintain ‘Add’.
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