BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Centrum Broking Report
In Q1 FY21 Britannia Industries reported robust growth in revenues/ Ebitda/ Profit after Tax at 26.4%/ 81.7%/ 104.7% led by strong execution resulting in volume growth at 21.5%, as resilient demand during Covid-19 pandemic for premium biscuit category surprised with double digit category growth. Nonetheless, pace of new product launches reduced as management chose to apply 80:20 rule by producing high throughput products due to supply chain constraints. Its emphasis on rural markets helped in gaining market share in the Hindi speaking belt.
Management said its focus on rural distribution, innovation, cost cutting efforts and adjacent business helped to deliver profitable growth. Despite 3% raw material cost inflation Britannia reported all time high Ebitda margin at 21.0% over 634 basis points YoY due to better product mix, efficiencies reduced distance, zero wastage and cost optimization. Considering Q1 FY21 performance we have increased FY21E/ FY22E revenues and earnings by 2.6%/0.9% and 12.8%/6.9%, respectively.
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