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Systematix Research Report
Britannia Industries Ltd. reported a blockbuster quarter with an all-around beat, led by higher-than-expected volume growth and price hikes. Key takeaways are-
domestic revenue growth of 22% with 4% volume growth and 18% pricing/mix contribution,
three-year compound annual growth rate trajectory for revenue/volume improved to 12.8%/5% in Q2 FY23, despite sharp price hikes, indicating premiumisation and strong underlying demand for the biscuits category,
market share continued to improve for 38th quarter with the gap with the No.2 player increasing sharply,
no impact of rural slowdown for Britannia, given its distribution efforts,
280 basis points QoQ Ebitda margin improvement on another 7% price hike in the Q2, in light of 3% raw material inflation and 50% acceleration in cost savings (cumulative inflation of 32% in last seven quarters, countered by 21% price hikes and 3% cost efficiency benefits),
strong sequential growth in multiple innovative products in both biscuits and new categories,
further reduction in inter-corporate deposits to Rs 5.9 billion from Rs 6.9 billion in Q1,
debt taken to fund capex at an attractive rate of 5.8% and
positive growth outlook, with marketing spends being normalised, distribution efforts continuing and innovation pipeline strengthened further.
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