Good Day and Tiger Biscuit-maker Britannia Industries is anticipated to report a robust set of numbers for January-March quarter of FY21 (Q4FY21) as client items’ demand reaches pre-Covid ranges. Analysts forecast a excessive, single-digit progress in gross sales quantity together with as much as 25 per cent YoY progress in web revenue for the FMCG big, which is slated to report its This autumn outcomes on Tuesday, April 27.
“We anticipate Britannia to construct on its strategic pillars of improvements, inexpensive packs/pricing, direct distribution, adjoining product segments (cake, Cream wafers, salted snacks, milkshakes), price effectivity packages, and excessive progress in Hindi heartland (1.3-1.6x) to report strong set of numbers in This autumn,” famous analysts at Prabhudas Lilladher in an earnings preview report.
The brokerage notes that the Bengaluru headquartered agency has declared dividend price Rs 62 for FY21, suggesting a payout of 75 per cent, which can improve return on fairness (ROE) to 75 per cent by FY23. “Though we’ve got lower our EPS estimates for FY22/23 by 1 per cent/2 per cent to account for dividend paid, we preserve BUY score on the inventory with a goal worth of Rs 4,189 per share,” they stated.
The inventory is at the moment quoting at Rs 3,651, and is 9 per cent down from its 52-week excessive degree of Rs 4,015 per share, touched on July 21, 2020. On a year-to-date (YTD) foundation, the counter has outperformed the Nifty FMCG index however has underperformed the benchmark Nifty50. Britannia is up 2 per cent to this point in CY21 as in opposition to a 2.5 per cent rise within the Nifty50 and 1.3 per cent decline within the Nifty FMCG index, ACE Fairness information present.
Right here’s what key brokerages anticipate from the corporate’s This autumn outcomes:
Kotak Institutional Equities
Given the secure to moderating biscuits demand publish the Covid-19 led spike seen in 1HFY2021, the brokerage expects Britannia’s income to develop 8.5 per cent year-on-year (YoY) to Rs 3,111.8 crore, however slip round 2 per cent quarter on quarter (QoQ). Within the year-ago quarter, the consolidated income was Rs 2,867.7 crore whereas within the earlier quarter of the present fiscal, it was Rs 3,165.6 crore.
The brokerage is factoring-in 8 per cent quantity progress and 1.6 per cent price-mix progress in standalone enterprise.
“We mannequin round 50 bps QoQ contraction in gross margin to 42.6 per cent (from 43.1 per cent) given enter price pressures (Palm Oil). Additional, we mannequin 60 bps QoQ decline in Ebitda margin to 16.8 per cent (19.3 per cent) given gross margin pressures and better A&P spends to assist new launches,” it added.
That stated, gross/Ebitda margin could develop 300/290 bps YoY, respectively, from 39.7 per cent and 15.8 per cent.
Assuming an 8 per cent YoY progress in gross sales quantity, the brokerage is forecasting a 9 per cent YoY, however -1 per cent QoQ, enchancment in income at Rs 3,133 crore for the quarter below examine. Ebitda, in the meantime, is pegged at Rs 593.2 crore, clocking a notable progress of 31 per cent YoY from Rs 454.3 crore. Within the December quarter, the identical was Rs 611.5 crore.
“Moderation in wheat and skimmed milk costs (SMP) costs is probably going to assist develop gross margins by 330bps whereas price financial savings may drive Ebitda margin enlargement of 300bps YoY to 18.9 per cent,” it stated.
Nonetheless, decrease tax charge in base quarter could restrict consolidated web revenue progress to Rs 432.6 crore, up 16 per cent YoY however down 4 per cent QoQ. The identical was Rs 372.6 crore in Q4FY20 and Rs 452.6 crore in Q3FY21. The pre-tax revenue, it says, may develop 28 per cent YoY to Rs 585.2 crore from Rs 457.4 crore.
On a standalone foundation, the brokerage presumes a ten per cent YoY progress in PAT at Rs 419.9 crore, up from Rs 381.2 crore reported in Q4FY20.
“Gross margin and Ebitda margins have peaked out given unlock led softening of demand and improve in RM and Overheads. We anticipate 270bps margin enlargement and 29.5 per cent Ebitda progress YoY as Q4FY20 was impacted because of lockdown,” it stated.
A barely optimistic stance on the agency leads the brokerage to forecast 2.2 per cent sequential decline in web revenue at Rs 440 crore whereas Ebitda could lower 7.5 per cent QoQ to Rs 570 crore. Income, in the meantime, is seen flat QoQ at Rs 3,120 crore.
“We mannequin 333bps YoY enlargement in gross margin pushed by higher product combine. Moreover, give attention to price optimisation by the corporate will end in Ebitda margin enlargement of 230bps YoY to 18.1 per cent,” it stated in its consequence preview report.
The brokerage will eye the administration’s commentary on downtrading tendencies, new launches, and completion of the crops.