Britannia Industries Ltd — Q1 FY24
Britannia reported Q1 FY24 revenue growth of 9% YoY, driven entirely by transaction growth, with operating profit surging 37% YoY.
neutral
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✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
79%Questions answered1Evaded / deflected12Questions auditedConsistentNumbers vs filing
Partial answer
High priority
Why is volume growth sluggish despite pricing actions?
Asked by Abneesh Roy, Nuvama Institutional Equities
Acknowledged sluggishness but gave no concrete timeline for volume recovery.
no specific timelineblamed market sluggishness
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Question
My first question is on the volume growth, which was sluggish. Could you elaborate what exactly you are doing to the overall pricing initiative? In case you have passed on grammage back to customer, when do you see the volume trajectory benefit because of that?
Varun Berry, Vice Chairman and Managing Director
The fact is that we've not equated prices everywhere. We have taken a very cold call on what is necessary and what is not. Second is that the markets are little sluggish compared to what we've seen in the past.
Answered
High priority
Is market share loss to local players credible?
Asked by Abneesh Roy, Nuvama Institutional Equities
Directly confirmed local players gained share and explained the dynamic.
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Question
Number two, share has lost significant market share, that benefit does not seem to have come to us. You have also lost, I think, a share. Is this data credible, anybody credible who has gained market share?
Varun Berry, Vice Chairman and Managing Director
We have been flattish, the reason for the gainers of market share have been all local players. The local players, because of the pricing actions that they're taking in their small vicinities, have gained a little bit of market share.
Partial answer
Medium priority
What cost savings from captive dairy consumption?
Asked by Abneesh Roy, Nuvama Institutional Equities
Admitted no current cost advantage but promised future benefits without specifics.
no current savingsdeferred to future
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Question
In dairy, you have mentioned captive consumption of FMC, FCN. What does it translate in terms of, say, any savings in terms of cost?
Varun Berry, Vice Chairman and Managing Director
At this point, there is no cost advantage of doing that, but there is no cost disadvantage either. We are in the process of scaling up the factories. Yes, once we've scaled them up fully, we will start to see cost advantages as well.
Answered
Medium priority
Why is Rusk growth not strong despite innovation?
Asked by Abneesh Roy, Nuvama Institutional Equities
Directly attributed to tepid market and regional competition, consistent with earlier explanation.
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Question
Taking Rusk, your commentary was that not very strong, reasonably strong in terms of growth, and you have been seeing innovation very aggressively over the past many quarters. What is the issue here?
Varun Berry, Vice Chairman and Managing Director
It's a mix of both. One is, the market growths have been a little tepid, and second is that regional competitors, again, similarly, what I told you about biscuits, same phenomena is happening here as well.
Evasive
High priority
Should we expect flatish EBITDA margin for full year?
Asked by Ravi Mehta, Macquarie
Did not directly answer whether margin would be flatish; cited historical numbers.
did not confirm or denygave historical context instead
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Question
First, would it be fair to say that once you reflect the entire impact of the rise in price-based competition, hence we should maintain our expectations of flatish EBITDA margin for the full year?
Varun Berry, Vice Chairman and Managing Director
Well, I would not say that it's not flatish. If you look at our trajectory for many years, except for, you know, if you look at it, if you look at 2021, 2022, we were at an average of about 14%, right, on operating profits. In Q1, we are at 15.6%.
Answered
High priority
Will 2% pricing growth assumption be revisited?
Asked by Ravi Mehta, Macquarie
Clearly stated 2% pricing growth will not happen; expects flattish pricing.
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Question
You had said that we should expect about 2% growth is what you have built in, or you would expect for next year or this year. Does that need to be revisited given the recent-...
Varun Berry, Vice Chairman and Managing Director
No, so that 2% will probably not happen this year. It seems that it will be a flattish year from a price standpoint.
Answered
High priority
Why margin fell despite limited price cuts?
Asked by Speaker 11, IIFL Securities
Provided specific numbers explaining the margin decline: price reversals and fiscal benefit timing.
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Question
This quarter, it's a 9% value growth and zero volume, so it's a gap of about 10%. If I look at it in Q4, it is also about 9%. It doesn't seem that there has been a lot of price cuts... Yet, if I look at your EBITDA margins, even adjusted for the CLI one-offs, I think it was close to 19% in Q4, which has come down to 17.5%. how do we explain this?
Varun Berry, Vice Chairman and Managing Director
In this quarter, we've taken price reversals of about 1.8%. There were fiscal benefits, which were one-time CLI, cool, which was taken in Q4 last year, which was 2.4%. Price reversals are 1.8%. Fiscal benefits are because they were taken in Q4 and not in Q1, so that's 2.4%.
Answered
High priority
Will margins drop further from current levels?
Asked by Speaker 11, IIFL Securities
Directly denied that margins would go below current quarter levels.
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Question
It is possible that, in net terms, the margins might go below what we have seen this quarter. Am I reading that right?
Varun Berry, Vice Chairman and Managing Director
No, you're not reading it right. I didn't say that at all.
Answered
Medium priority
What is the quantum of incentives booked from UP and TN?
Asked by Shirish Desai, Centrum Broking
Provided specific numbers for TN incentive booked and explained UP status.
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Question
What is the quantum which we have already booked in this quarter or maybe this year expected to come?
Varun Berry, Vice Chairman and Managing Director
On the incentives, UP, we have still not got the eligibility certificate, so nothing therefore is recognized in the books. TN, we have got the eligibility certificate, and a very small amount has been booked in quarter one. It's about INR 7 crore-INR 8 crore have been booked in quarter one.
Partial answer
High priority
Could rising commodity costs pressure margins further?
Asked by Anna Mitchell, Goldman Sachs
Acknowledged flour risk but said covered for 3-4 months; no quantified offset plan.
downplayed some risksno specific offset quantification
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Question
Our understanding is there is a bit of a sequential up move we are seeing in edible oil, sugar, and possibly even in wheat flour. In this environment, do you not feel that there could be more pressure in margins in the near term, or are there other ways you could offset this situation?
Varun Berry, Vice Chairman and Managing Director
Edible oils actually are at the lowest, ever, ever in the last, three, four years. Sugar, yes, there has been a little bit of, inflation, but I think the government is very clear that they want to control this. Flour is the one which we really have to watch... At this point in time, it seems we are covered for the next, three or four months.
Answered
Medium priority
Will ad spend remain at INR 675 crore or revert to INR 500 crore?
Asked by Kunal Vora, BNP Paribas
Indicated ad spend as percentage of revenue will remain in 3.5-4% range.
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Question
When we were at INR 400-INR 500 in the earlier years, it went to INR 675, which is a sizable jump. Will you remain closer to INR 675 or go back to the INR 500 levels which you had earlier?
Varun Berry, Vice Chairman and Managing Director
We are at about, you know, if you remove the sales expenses, we are at about 3.5%-4% of our revenue, right? It will remain in that percentage, roughly.
Answered
Medium priority
What is the CapEx plan for FY24?
Asked by Latika Chopra, JPMorgan
Provided a specific CapEx range for FY24.
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Question
My second question was on CapEx plans for FY 2024. We saw system step up in FY 2023, so just wanted to know what you're thinking about FY 2024.
Varun Berry, Vice Chairman and Managing Director
Yeah, it's gonna be about INR 400 crores, INR 450 crores.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Q1 EBITDA margin 15.6% | 15.6% | 15.6% | Matches filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.