Britannia Industries Ltd — Q3 FY24
Britannia reported Q3 FY24 revenue of INR 4,192 crore, up 2% YoY, with operating profit margin of 17.7%.
neutral
medium
✓ 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.
63%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Volume growth for Q3 and future outlook
Asked by Mihir Shah, Nomura
Management gave aspirational targets but no concrete timeline or commitment.
no specific timelineaspirational language
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Question
So kindly correct me if I'm wrong on the volume growth for third quarter, will it be about 5.5%? And given that you have highlighted that the demand environment is progressively recovering, do you see the market being conducive to drive volume growth to high single-digit levels...
Varun Berry, Vice Chairman and Managing Director
I think the time is now coming where we will hopefully get to higher volume growths... aspiration is to get back to double-digit volume growths soon. I think it will take a little bit of time. I don't think it's gonna happen in the next quarter or so...
Evasive
High priority
Levers for margin improvement beyond current levels
Asked by Mihir Shah, Nomura
Management did not specify new levers for margin expansion beyond cost efficiency.
no specific levers quantifiedshifted focus to top-line growth
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Question
When one looks at the gross margins and EBITDA level margins, Britannia is at its best currently. Apart from lower raw material prices and better mix... what levers can drive margin improvement from here on, and tide over the EBITDA margins over the 19% range?
Varun Berry, Vice Chairman and Managing Director
I do think that... our cost efficiency programs are best in class... I think that's definitely one pillar which will continue. I do think that as we go forward... it's gonna be important for us to look at how do we keep our margins stable and grow the top line aggressively.
Partial answer
Medium priority
Outlook on pricing and potential price cuts
Asked by Mihir Shah, Nomura
Management gave a general outlook but no specific guidance on pricing actions.
no specific guidance on timingconditional language
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Question
Do you see more price cuts going forward? While I know that there is no business case for to start taking price hikes anytime soon, but anything that you can share on visibility on where when pricing growth can come back...
Varun Berry, Vice Chairman and Managing Director
No, I don't think there's gonna be a need for price hikes, because as you saw in the commodity situation, they have been a little soft... it's an election year. Things will be okay for this year for sure... we'll have to watch the situation carefully and then take actions whichever way it's required.
Answered
High priority
Size and growth drivers of cheese business
Asked by Aditya Soman, CLSA India
Management provided a specific revenue target for the cheese business.
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Question
On the cheese business, you indicated that this is now, sort of 10%. How large can the business be, in, let's say, a 3- or 5-year period? And, what are the main drivers of this, growth of... in this business?
Varun Berry, Vice Chairman and Managing Director
It's not 10% of our business... It's grown 10%... The objective will be to take this business from a really small business at this point in time to be, let's say, at least INR 1,000 crore business in the next five years.
Answered
Medium priority
Size and performance of e-commerce business
Asked by Aditya Soman, CLSA India
Management gave a specific percentage and growth trajectory.
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Question
In terms of, e-commerce and quick commerce, can you just, tell, indicate how large that business is, each of those businesses, and how they fared, let's say, compared with a year ago?
Varun Berry, Vice Chairman and Managing Director
It today is about 2.9%-3% of our total business, which is not big, but if you think about it, we started from 1% a few years ago, and from there we've come to 2.93%. It's a business which is, you know, also profitable.
Partial answer
Medium priority
Pack growth vs volume growth and which metric to track
Asked by Abneesh Roy, Nuvama
Management gave a range for pack growth but did not definitively answer which metric is more important.
approximate number givendid not specify which metric is better
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Question
I wanted to understand how has been the pack growth this time, and given your gross margin and EBITDA margin have done so well and for the industry, which is the right metric to track...
Varun Berry, Vice Chairman and Managing Director
The volume growth is 5.5. This will probably be in the... I don't know the exact number, but it'll be in the range of 3, 3, 3.5-ish. So, so that's where it stands.
Evasive
High priority
Sustainability of 19%+ EBITDA margins and competitive intensity
Asked by Abneesh Roy, Nuvama
Management did not directly address whether 19% margins are sustainable.
did not confirm margin sustainabilityshifted focus to top-line growth
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Question
In the last 5 quarters, 4 quarters have been 19%+ EBITDA margin. So will it be fair to say that, now because of the premiumization or whatever, cost initiatives you have taken, this is a more realistic margin? And second question is because entire industry is also seeing good margin, if you could comment on local players, is that now coming off as a competitive intensity?
Varun Berry, Vice Chairman and Managing Director
There is competitive intensity from local players... we will have to look at what is the best way of doing this, and how do we grow the profit, but without really focusing as much on the percentage.
Answered
High priority
Revenue growth composition and margin outlook
Asked by Latika Chopra, JPMorgan
Management gave specific growth differential and margin peak indication.
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Question
On revenue, when you aim for a high single digit, low double digit kind of volume growth, what part of this is coming from your base business of biscuits? And the second bit on margins, should we take that 19% is given or your prior comments of 16%-17% kind of margin trajectory with a higher emphasis on revenue growth?
Varun Berry, Vice Chairman and Managing Director
Our contribution from adjacent businesses has to grow much faster than base business... I would say at least 50% higher than what we grow our base business... I would say 19 is our peak... I would say more in the space of growing the profit on an overall basis through a more aggressive top line growth.
Answered
High priority
Sequential price cuts and margin impact
Asked by Percy Panthaki, India Infoline
Management corrected the analyst's assumption and provided a specific range.
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Question
On a YOY basis, your pricing is negative about 3-3.5%, whereas in Q2, it was positive by about 1.5%. So first of all, would I be right in assuming that on a sequential basis, Q2 versus Q3, you have taken a price cut of about 4%-5%? And in context of this price cut, how is it that your margins are more or less the same as what they were in Q2?
Varun Berry, Vice Chairman and Managing Director
Not 4-5, maybe 2-3... versus last year, it'll probably be 4, but from a quarter-on-quarter basis, maybe 2-2.5%.
Answered
Medium priority
Market share gains by geography and new plant status
Asked by Shirish Pardeshi, Centrum Broking
Management provided specific geographic gains and plant details.
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Question
Would you comment which geographies? Because earlier you used to give the focus market share, focus state market share also, that is not given now. And second, on UP, Bihar plant, what is operational, where do you think this plant... how many lines?
Varun Berry, Vice Chairman and Managing Director; Vinay Singh Kushwaha, Chief Technical and Strategy Officer
Our gains this year from a geographic standpoint has been from the Hindi belt predominantly... Our factory in UP has got four lines of biscuits, and we set up one line for rusk... Bihar, we set up one new factory... three lines.
Answered
Medium priority
Urban vs rural growth and distribution reach
Asked by Sheela Rathi, Morgan Stanley
Management confirmed urban outperformance and gave a specific potential for outlet expansion.
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Question
Is it fair to say that the urban growth did far better for us versus the rural growth, on the basis of the comment you made that premium portfolio is doing well for us? And when I look at the direct distribution reach, it feels like the pace of increase in distribution has slowed down...
Varun Berry, Vice Chairman and Managing Director
Yes, that's true. We've not seen rural growths the way we've seen them in the last 10 years... The pace of growth as far as distribution, as you go higher, you tend to have less opportunity for growth... we still have the potential to grow this by at least 1 million more outlets.
Declined
High priority
Margin outlook for Q4 and FY25
Asked by Amnish Aggarwal, Prabhudas Lilladher
Management explicitly declined to provide a margin forecast.
refused to give forward guidance
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Question
Going into fourth quarter, where we had one-time PLI arrears, and our gross margins are upward of 44%. So what is the medium-term outlook? Like you said, that 19% is your aspirational level. So should we expect the margins to moderate in Q4 and going forward in, say, your FY 2025?
Varun Berry, Vice Chairman and Managing Director
We never give forward-looking forecast. So, you know, we, I will not be able to give you any number out there... Objective will be to maintain margins and grow our business aggressively.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Volume growth for Q3 is 5.5% | 5.5% | 2% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.