Britannia Q4FY22 Results Preview: FMCG major may report mute-to-stable earnings, margins may see pressure

Fast-moving consumer goods (FMCG) major Britannia is scheduled to report its fourth-quarter earnings for the financial year 2021-22 (Q4FY22). Several brokerages see the company may register mute-to-stable earnings during the quarter, however, believe margins may be under pressure. 

According to Axis Securities, Britannia’s profit may slip over 4 per cent year-on-year to Rs 349 crore, while revenue may surge almost 12 per cent YoY to Rs 3,398 crore in Q4FY22.  

The brokerage expects 6 per cent volume/ price-led growth in Q4FY22 owing to the deceleration of the in-home consumption trend and a price increase to mitigate the raw material inflation. It added, gross margins to contract 256 bps YoY amid a rise in costs for agri-commodities and packaging costs. 

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins to contract 160 YoY on gross margins contraction and cost rationalisation, Axis Securities said.  

While the key monitorable will be demand environment; raw material cost outlook; market share trends and update on core biscuits portfolio and adjacencies, according to the brokerage. 

While YES Securities expect the profit of FMCG company to surge by over 2.5 per cent YoY to Rs 373.9 crore, while its revenue to grow by Rs 3475.1 crore, up 11 per cent YoY in Q4FY22. Similarly, its EBIDTA margins may contract by 54 bps YoY. 

The brokerage expects 2/9 per cent volume /price growth to lead topline growth and sequential margin improvement. 

Highest of all in expectations, IIFL Securities see Britannia’s Q4FY22 profit may surge by over 7 per cent YoY to Rs 391 crore, while sales may jump over 13.5 per cent YoY to Rs 3452 crore in the March quarter. 

The brokerage said, “FMCG volumes have declined by a high-single-digit during January-February 2022, while value stayed flattish. Britannia is expected to report double-digit growth this quarter.”