Britannia Q4 preview: Revenue may grow in double digits on 7-9% increase in volumes
Prabhudas Lilladher estimates a 9 percent volume growth during Q4 FY21 on the back of improvement in demand to pre-COVID levels and a favourable base.
April 27, 2021 / 08:06 AM IST
Biscuits manufacturer Britannia Industries is likely to report a 7-9 percent year-on-year (YoY) growth in volumes, with an 8.5-10.5 percent YoY rise in revenue for the quarter ended March 2021. Profit may take a hit higher tax expenses but will get support from operating income.
"We estimate a 9 percent volume growth during Q4 on the back of improvement in demand to pre-COVID levels and favourable base," said Prabhudas Lilladher which expects over 10 per cent YoY growth in profit and revenue in Q4 FY21.
"We build in sequentially stable to moderating biscuits demand post the COVID-19 led spike seen in the first half of FY21. We expect an 8.5 percent YoY revenue growth in consolidated revenue (off a muted base). We model an 8 percent volume growth and 1.6 percent price-mix growth on standalone business," said Kotak Institutional Equities which expects 7 percent growth in profit and 67 percent YoY rise in tax expenses.
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At the operating level, EBITDA is likely to grow more than 28 percent and three-digit expansion in margin for the quarter ended March 2021, though sequentially, there could be a contraction in both EBITDA and margin.
"Gross margin and EBIDTA margin have peaked out given the softening of demand and increase in raw material and overheads. We expect 270 bps margin expansion and 29.5 percent EBITDA growth YoY," said Prabhudas Lilladher.
Kotak said, "We model around 50 bps QoQ contraction in gross margin given input cost pressures (palm oil). We model 60 bps QoQ contraction in EBITDA margin given gross margin pressures and higher advertising & promotion spends to support new launches. Gross and EBITDA margin may expand 300 bps and 290 bps YoY respectively."