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Last Updated : Jun 02, 2020 08:33 AM IST | Source: Moneycontrol.com

Britannia Q4 profit may see double-digit increase on low tax cost

Motilal Oswal also expects around 16 percent rise in profit, but revenue growth is expected to be around 2.2 percent with flat sales volumes YoY.

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Biscuit maker Britannia Industries, scheduled to report earnings on June 2, is expected to post a double-digit increase in profit in quarter ended March 2020, driven by lower tax cost.

But revenue from operations may see a flat to moderate growth during the quarter as sales volumes could see flat to lower single-digit growth compared to year-ago, impacted by COVID-19-led lockdown.

"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). Additionally, 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.

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Motilal Oswal also expects around 16 percent rise in profit, but revenue growth is expected to be around 2.2 percent with flat sales volumes YoY.

On the operating front, earnings before interest, tax, depreciation and amortisation (EBITDA) may see single digit growth with margin expansion compared to corresponding period last fiscal, supported by lower advertising expenses and forward contracts for key agri commodities.

"We build a marginal 22 bps expansion in gross margin as the company will likely 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 8.6 percent increase in EBITDA YoY.

EBITDA margin is expected to improve by 30 bps YoY 15.9 percent led by lower advertisement expenses, Narnolia feels.
First Published on Jun 2, 2020 08:33 am
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