Britannia Q4 consolidated profit may grow in double digits, volume growth could be around 3%

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26 Aug, 2025 12:21

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Biscuits major Britannia Industries could report double-digit growth in consolidated profit in March quarter due to the lower tax rate. Meanwhile, revenue growth is expected to be around 4-5 percent compared to same period last year.

According to brokerages, domestic volume growth may be in the range of 2.5-3 percent which along with product and price mix will support revenues.

"We expect a weak quarter with 4.1 percent topline growth in the standalone business (2.5 percent volume growth and 1.6 percent price+mix). Furthermore, weaker performance in the international business is expected to further drag consolidated performance," said Kotak Institutional Equities which sees 15 percent growth in consolidated profit and 3.7 percent in revenue.

Sharekhan also sees domestic business volume growth at 2.5 percent as biscuits/rusk registered good demand prior to the lockdown. "Realisation growth is expected to be at 1.5 percent."

Centrum Broking estimated Britannia's revenue to increase 5.1 percent YoY, led by 3 percent domestic volume growth and the rest from product and price mix change.

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In the base quarter Q4FY19, volume growth came in at 7 percent.

At an operating level, Britannia sees single-digit growth in earnings before interest, tax, depreciation and amortisation (EBITDA) due to cost rationalisation measures and lower ad spending.

Recently, there was a sharp increase in its key raw material prices – crude palm oil (up 28 percent), wheat (up 7 percent), milk powder (up 33 percent) and sugar (up 6 percent), however, in Q4FY20, the company has taken adequate cover for such commodities including wheat flour.

"We build a marginal 22 bps expansion in gross margin as the company should benefit from forward contracts for key agri commodities. We expect a 74 bps YoY expansion in EBITDA margin on the back of cost rationalization measures," said Kotak which sees EBITDA rising 8.6 percent.

Among brokerages, Centrum expects the maximum EBITDA growth 11.8 percent YoY, and sees EBITDA margin rising around 101 bps YoY, assuming lower ad-spends, and higher supply chain efficiencies.

Key things to watch out for would be the commentary on disruption in manufacturing and logistics due to COVID-19-led lockdown from March 25.

The stock gained more than 3 percent on April 22 ahead of earnings scheduled to be announced on April 23. It had fallen 34 percent during February 7-March 23 and since then it started recovery, rising 38 percent from March 23's low.