BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Britannia Industries Ltd. continues to report good headline prints – mid-single digit volume growth amid rural slowdown and inflationary raw material (lower grammage in price point packs implies unit/packs growth would have been higher).
We reckon, in Q4, it had benefited from long-term commodity contracts. Road ahead on input cost index is a tough one - headroom for grammage reduction is lower now (for some time).
Consensus (including us) expects Britannia to invest in new categories, however, pressure on core margins (15.5% in Q4 FY22) is likely not providing ammunition.
We believe, it will now have to re-earn the (premium) multiple as consensus was generous in previous re-rating cycle.
Going forward, success of (at least few) new segments and ramp-up of adjacent categories is imperative.
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