Domestic volume growth may be in the range of 2.5-3 percent which along with product and price mix will support revenues, feel brokerages.
Shares of biscuits maker Britannia Industries gained nearly 10 percent intraday on April 23 ahead of earnings for the quarter ended March 2020.
The stock has recovered 51 percent from the lows touched on the same date a month ago. The company's shares fell 34 percent between February 7 and March 23 due to weak market conditions following the novel coronavirus crisis.
At 0958 hours IST, Britannia was trading at Rs 3,204.05, up Rs 251.80 or 8.53 percent on the BSE.
According to brokerage houses, Britannia is expected to report double-digit growth in consolidated profit in the March quarter due to the lower tax rate. Meanwhile, revenue growth is expected to be around 4-5 percent compared to the same period last year.
Brokerages expect 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 expects 15 percent growth in the consolidated profit and 3.7 percent in revenue.
Centrum Broking expects 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.
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.
"We build a marginal 22 bps expansion in gross margin as the company should benefit from the 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.Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!
