Britannia Q3 Results Review: Dolat Capital Maintains 'Accumulate’ Rating On The Stock — Here's Why

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Dolat Capital Report

Britannia Industries Ltd.’s Q3 FY25 results were ahead of our estimates. The revenue growth of 7.9% YoY was led by 6.0% volume growth, despite weak consumer sentiments.

Gross margin contracted by 510 basis points YoY to 38.7% due to commodity cost inflation. To tackle raw material inflation, the company has implemented a price hike of ~2%. Further, it will resort to ~4.5% price hikes over Q4 FY25E and Q1 FY26E. However, the Ebitdam contraction was restricted to 90bps led by cost saving initiatives. The management remains optimistic about maintaining margins, going ahead.

We have upward revised our EPS estimates for FY25E by 2.3% at Rs 90.2 factoring in Q3 performance.

However, we have maintained our FY26/27E EPS estimates at Rs 102.1/113.7. Valuing the stock at 50x FY27E EPS, we maintain target price of Rs 5,684. Maintain 'Accumulate’ rating.

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