Britannia Q3 Review - Topline Outlook Challenging; Elevated Margin Unlikely To Sustain: Motilal Oswal

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Motilal Oswal Report

Britannia Industries Ltd. was aided by a confluence of positive factors in nine months FY21, such as high in-home consumption (biscuits constitute 75–80% of sales), reduction in ad spends, decline in material cost, and low promotional spends (owing to strong demand).

These are likely to drive the strongest topline growth since FY12 (13.5% in FY21E) and the highest profit after tax growth since FY16 (40% in FY21E).

However, the sales momentum is tapering after an extraordinary spurt of 26.1% in Q1 FY21, with 12.1%/6.1% growth in Q2/Q3.

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