Britannia share price rises 7.5%: largest gainer among Nifty-50 stocks post Q4 results: 3 key reasons driving the gains
- Stock Market Today: Britannia Industries share price gained more than 7% during intraday trades on Monday and was largest gainers in the Nifty-50 stocks. The stocks is also trading near 52-week highs What's driving the gains explained
Stock Market Today: Britannia Industries share price gained more than 9% during intraday trades on Monday. Trading with gains of close to 7.5% in the afternoon trades, Britannia Industries share price was largest gainer in the Nifty-50 stocks. Britannia Industries share price is also trading near 52- week highs seen during the month of December'2024. The gains for Britannia Industries share price are being driven by recovery expectations and some green shoots on rural recovery witnessed recently said analysts.
Britannia Industries had declared its Financial performance for Quarter ending March'2024 post market hours on Friday.
Britannia’s Consolidated Sales for the Quarter ended 31st March 2024 stood at ₹4,014 Crores, growing 3.1% over ₹3,892.02 crore during the same quarter last year. Its operating profit as per company stood at at ₹708 Crore (17.6% of Sales). The net profit at ₹536.61 crore nevertheless declined compared to ₹555.7 crore in the year ago quarter.
For the year ended 31st March 2024, consolidated revenue stands at ₹16,546 Crores growing 3.5% over previous year and operating profit stands at ₹2,869 crores growing 10.1% (17.3% of Sales)
it is the weak rural demand that had been weighing on performance of consumer companies including those of Britannia Industries and Britannia Industries share price.
Results meet expectations despite weak demand
Analysts at Nuvama Institutional Equities said that Q4 results were in line with their estimates
Analysts at ICICI Securities said that Consolidated gross margin remained stable at 44.9% as commodity basket prices largely remained stable. EBITDA margin though declined by 56bps sequentially to 19.4% driven largely by higher brand investments (other operating expenses were up 78bps YoY). The expectations of good wheat crop and good nonsoon expectations keep analysts optimistic on margins.
Market share maintained and expected to grow
Analysts at Nuvama Institutional Equities said that Britannia Industries focus states surpassed other regions in terms of growth, despite a generally subdued rural demand. Gross margins expanded by 107 basis points YoY and 113bp sequentially to 44.1%. Ebitda margin contracted by 56bp YoY to 19.4%. Rural demand which has been a laggard for FMCG industry is expected to revive in FY25 on the onset of likely strong monsoon. Analysts expect Britannia to be a beneficiary of this revival. Further, a good wheat crop output will aid margins.
Those at ICICI Securities said that market share gain trajectory despite resurgence of competition with correction in input prices is impressive (unlike other categories where large organized players have lost market shares).
Also the Distribution expansion also continues to be robust as per ICICI Securities with direct reach and rural distributors at 2.8 million outlets (versus 2.7 million as of March’23) and 30,000 (versus 28,000 as of March’23) respectively.
ICICI Analysts also say that the Focus states growth continues to outperform other regions led by distribution expansion. Organized trade (modern trade and e-commerce) had double-digit growth in FY24
Dividend approved
Meanwhile Britannia board has Recommended the final dividend for the financial year ended 31st March, 2024 @ 7350% i.e., Rs. 73.5/- (Rupees Seventy Three and Fifty Paise Only) per equity share of Re. 1 /- each to be declared at the 105th Annual General Meeting of the Britannia Industries to be held in August.
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