Britannia Q3 net seen up 51%, focus on premium products

Britannia is expected to report another strong quarter with focus on premium products. Benign raw material pricing environment and cost cutting measures may boost margins. According to CNBC-TV18 poll, the food company's net profit is seen at Rs 208 crore in December quarter against Rs 137.3 crore in corresponding quarter last fiscal. Revenue in Q3 may rise 11.4 percent at Rs 2265 crore versus Rs 2033 crore in year-ago period. Earnings will be announced on February 9.

During the period, EBITDA is seen up 40.3 percent at Rs 308 crore versus Rs 220 crore while EBITDA margin is likely to be at 13.6 percent against 10.8 percent (YoY).

Analysts polled by CNBC-TV18 say re-launch of Good Day and Pure Choco Lush may push earnings. Volume is seen at 8-11 percent. Milkbikkis and Tiger are also seen to have made inroads in the Indian hinterland while marketing efforts may provide further impetus to revenues.

Analysts expect gross margins expansion of 150-250 basis points while soft input cost and premiumisation may aid gross margin expansion. Cost efficiencies may further aide operational gains beyond gross margins. Input costs are likely to remain curtailed amid benign pricing environment. Advertising and promotions spends may remain at elevated levels.