Britannia Q3 Review – Core (Volumes) Robust But Trajectory Of NPD Key For Performance: ICICI Securities

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Britannia Industries Ltd.’s reported another quarter (Q3 FY22) of good volume (in core) trajectory amid concerns on rural slowdown (overall) and inflationary raw material.

The company continues to benefit from strong brand positioning, direct distribution expansion and execution edge. We note price hikes for Britannia are a combination of higher MRPs and lower grammage; to that extent, the unit / packs growth would have been higher.

We believe, it (now) faces challenges to find headroom to invest in new categories amid pressure in core margins.

We believe the consensus was generous in previous re-rating cycle (narrative of total foods company pre-Covid-19) but will now require more concrete evidence.

Going forward, success of (at least few) new segments – salty snacks, wafers, croissants – and ramp-up of adjacent categories – dairy, rusks, cakes and now Milk Bikis in biscuits – are imperative.

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