Britannia Industries is expected to report a 5-7% year-on-year growth in its December quarter sales, driven by volume upticks, according to estimates from five brokerages. However, the company’s margins and net profit are likely to take a hit due to high inflation, which has pushed up raw material prices. The brokerages have pegged the Q3FY25 topline in the range of Rs 4,404 crore to Rs 4,485 crore, with a net profit decline of 5.4% to 8% over the October-December quarter of FY24.
Axis Securities expects Britannia’s revenue to grow 5.5% YoY to Rs 4,492 crore, with a PAT decline of 5.4% YoY and 1% QoQ. JM Financial estimates a 5.1% YoY growth in revenue to Rs 4,404 crore, with a PAT decline of 7.6% YoY. Kotak Equities sees a 5.2% YoY growth in revenue to Rs 4,477 crore, with a PAT decline of 8% YoY. HDFC Securities expects a 7% YoY growth in revenue to Rs 4,485 crore, with a PAT decline of 6.3% YoY. Motilal Oswal forecasts a 7% revenue growth YoY, led by volume growth of 5% in 3QFY25.
The brokerages are expecting a decline in Britannia’s EBITDA margin due to high inflation and weak operating leverage. The EBITDA margin is expected to decline by 198 bps to 17.3%, according to Axis Securities, and by 234 points to 17.3%, according to JM Financial. Kotak Equities expects a decline of 225 bps to 17%, while HDFC Securities sees a decline of 210 bps to 17.5%. Motilal Oswal expects a decline of 160 bps to 17.7%.
Investors are advised to watch out for the company’s guidance on the urban/rural demand environment, raw material cost outlook, and competition in the space. Britannia will announce its Q3 earnings on Thursday, February 6, 2025.