Britannia Industries is expected to report a consolidated net profit of Rs 517 crore in the April-to-June quarter of financial year 2023-2024. This represents a 53 percent increase year-on-year and a 7.4 percent decline sequentially, according to average estimates of six brokerage firms.
The company is scheduled to announce its financial results for Q1FY24 on August 4.
Revenue is estimated to be around Rs 4101 crore, which is an 11 percent growth year-on-year and a 2.1 percent growth sequentially.
Operating profit margins are expected to be at 18.2 percent, which is a 439 basis points increase on a year-on-year basis and a 199 basis points decline sequentially.
Volume growth is expected to be at 4.6 percent in the April-to-June quarter.
Costs of raw materials that Britannia uses have increased in the April-to-June quarter. Wheat prices have increased 4.9 percent and sugar prices have increased 4.1 percent year-on-year according to Incred Research. Milk powder prices have increased 1.2 percent year-on-year. Palm oil prices have fallen 39 percent year-on-year in the quarter. Britannia Industries uses palm oil for biscuits.
Raw material correction, price hikes, and premiumization will help to improve margins year-on-year, said Systematix Institutional Equities.
Kotak Institutional Equities expects margins to decline sequentially as margins in Q42023 were high on account of food processing Performance Linked Incentive scheme, and hence is said to normalise in Q1FY24.
“Rural is expected to do well for Britannia despite overall weakness as biscuits have remained more resilient than other segments,” said Nuvama Institutional Equities.
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