Britannia Q1 Review - Sales Momentum Healthy; ICD Reduction A Significant Positive: Motilal Oswal
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Motilal Oswal Report
Britannia Industries Ltd. reported flat sales and volume growth YoY in Q1 FY22, despite an extremely high base of ~27% sales growth (and 21% volume growth), well ahead of expectations.
Importantly, it achieved this despite no major pantry loading during the second Covid-19 wave lockdowns.
While Britannia's margins were below expectations – leading to in-line Ebitda and profit after tax, despite a significant sales beat – the outlook is better going forward, with calibrated price increases.
The key positive in the post-results call was the announcement of a sharp reduction in group inter-corporate deposits to Rs 4.7 billion at end-June 2021 from Rs 7.9 billion in March 2021 – these levels were last seen in FY18.
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