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Brokerage firm Edelweiss Securities sees 1.6 per cent year-on-year (YoY) rise in profit after tax on 6.9 per cent fall in revenues. It also projects 10.10 per cent dip in EBITDA in Q4FY20.
“We expect Britannia to post volume dip of around 8 per cent YoY on consumption slowdown,” the brokerage house said while adding there is some inflationary trend in raw material prices which will lead to gross margin compression of 80 basis points.
HDFC Securities believes that Britannia may report 9.5 per cent rise in net profit, while net sales and EBITDA may contract by 2 per cent and 4 per cent YoY, respectively.
“The impact from Covid-19 on the FMCG sector will be sharper on revenues for companies in Q4, despite many essential categories witnessing pre-buying at offtake level in March. Lockdown has impacted transportations and channel filling opportunities for the quarter. Trade inventory has reduced for most categories. Lockdown of the past 12 days will impact revenues of most companies,” the brokerage house said.
Market participants should zero in on the comments on capacity utilisation, category growth during the lockdown period, commentary on new launches and updates on the completion of plant from the upcoming quarterly results of the FMCG firm.
An assessment by Emkay Global Financial Services predicts a 5 per cent YoY rise in profit after tax on 4 per cent and 5 per cent drop in revenue and EBITDA, respectively.
“We estimate a volume decline of 7 per cent in the domestic business and 5 per cent growth in subsidiary revenues. Cost savings and lower ad spends to aid sustain operating margins. Lower effective tax rate (ETR) to drive PAT growth,” Emkay added.
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