KR Choksey's research report on Britannia Industries
For Q2FY25, BRIT’s revenue was INR 46,676 Mn, up 5.3% YoY (+9.8% QoQ), missed our estimates by 2.6%. Revenue growth was driven by high single-digit volume growth. In Q2FY25, gross margins declined by 136 bps YoY (-188 bps QoQ) to 41.5%. EBITDA was INR 7,834 Mn, down by 10.2% YoY (+3.9% QoQ), missed our estimates, due to higher-than-expected raw material cost and employee cost. EBITDA margin contracted by 290 bps YoY (-95 bps) to 16.8%. Adj. PAT was INR 5,316 Mn, down 9.5% YoY (+0.2% QoQ), missed our estimates, mainly due to poor operating performance. We lower our estimates for FY25E/FY26E by 11.5%/6.1% respectively, reflecting subdued demand, weaker-than-expected Q2FY25, and heightened competition.
Outlook
We apply a maintained P/E multiple of 52.8x on FY26E EPS of INR 106.0 (earlier: INR 113) to arrive at a target price of INR 5,601/share (earlier: INR 5,968). Implying an11.0% upside potential. We maintain an "ACCUMULATE" rating on Britannia Industries Ltd.
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