Company Update : Britannia Industries Ltd By Motilal Oswal Financial Services Ltd
In-line revenue; sharp cut in employee expenses drives EBITDA beat
* BRIT’s consolidated net sales (excluding other operating income) rose 6.5% YoY to INR44.6b (est. INR44.6b) in 3QFY25.
* Other operating income jumped 100% YoY to INR1.3b. Consolidated revenue rose 8% YoY to INR45.9b (est. INR45.5b).
* The company delivered ~6% volume growth in 3Q (est. 5%, 8% in 2QFY25).
* Consolidated gross margin contracted by 510bp YoY and 280bp QoQ to 38.7% (est. 42%) due to a rise in commodity prices.
* Employee expenses declined sharply by 47% YoY and other expenses declined 2% YoY.
* EBITDA margin contracted 90bp YoY to 18.4% (est. of 17.7%). ? EBITDA rose 3% YoY to INR8.4b (est. INR8.1b).
* APAT grew 4% YoY to INR5.8b (est. INR5.6b).
* In 9MFY25, net sales rose 6% YoY, EBITDA was flat YoY, and APAT was up 3% YoY.
Other key highlights
* Key commodities, such as wheat, palm, and cocoa, saw high inflation.
* BRIT navigated rising input cost inflation through strategic price adjustments, targeted brand investments, and fixed-cost efficiencies, ensuring stable operating margins while maintaining competitiveness.
* Its distribution network expanded to 2.9m direct outlets, with focus states achieving 2.6x growth, supported by 31,000 rural distributors.
* Portfolio innovations, including Dual Flavoured Layer Cake and Triple Chocolate Croissants, enhanced consumer offerings, while existing products delivered strong revenues.
* Adjacencies such as Dairy Drinks, Croissants, and Wafers recorded double-digit growth, driving BRIT’s vision of becoming a “Total Global Foods Company.”
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