A slight improvement in consumption both in urban and rural markets is likely to help Britannia Industries post 4-5% volume growth for the quarter ended September, which will also aid the topline.
The fast moving consumer goods maker is expected t0 report a nearly 13% year-on-year (YoY) rise in consolidated net profit for the September quarter to Rs 4,064 crore, according to ETNow poll.
But much of the growth in the topline will continue to be price-led, analysts said. Peers like
have said that they expect earnings to improve in the second half of the current financial year on easing commodity prices and improvement in rural demand.
Whether
too shares the same thought is something investors would watch out for when the company details earnings on Friday.
The operational performance will continue to feel the pinch of inflation in input prices.
Wheat is a key raw material for Britannia and it constitutes 14% of sales. Prices of wheat have risen about 24% YoY in the last quarter, and 9% sequentially. Prices of sugar have gone up by 4% YoY.
While palm oil prices, another key raw material, have fallen both YoY and sequentially, incremental benefits of the same will reflect only in the current quarter.
Price hikes and some operating leverage benefits will help operating profit see moderate growth in operating profit. ET Now poll sees operating profit rising 6.5% YoY to Rs 594 crore.
“Gross margins will improve sequentially and will be marginally higher by 20 bps YoY. EBITDA margins expected to come in at 14.7% down 80 bps YoY,” brokerage Prabhudas Lilladher said in its report.
Consolidated net profit is seen rising over 8% on year to Rs 416 crore.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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