Britannia down 2% on posting Q3 results; Should you buy, sell or hold?

Shares of biscuit maker Britannia slipped 2.1 per cent in on Friday, logging an intraday low at Rs 4,852 per share. Around 1:42 PM, Britannia share price was down 1.65 per cent at Rs 4,877 per share. In comparison, the BSE Sensex was down 0.21 per cent at 77,895.02.

 

In the third quarter ended December 31, 2024, Britannia reported a 5 per cent increase in consolidated net profit to Rs 582 crore for the three months ended December 31 as compared to Rs 556.39 crore a year ago. The company reported a revenue of Rs 4,592.62 crore for Q3 as against Rs 4,256.33 crore a year ago which implies a rise of 7.9 per cent. 

 

Consumer staple companies such as Britannia, Hindustan Unilever and Nestle India have had to contend with inflation in key commodities such as palm oil, cocoa and sugar. 

Britannia con call update: 

In the con call, Britannia's management said the total price increase in Q3 was 2 per cent, while 4-4.5 per cent price increase in expected in FY25 end. The management is eyeing to increased 6-6.5 per cent price increase with 2-2.5 per cent cost efficiencies in FY25. 

 

The management guided Earnings before interest, tax, depreciation and amortisation (Ebitda) margin to stay in the current range of 17-18 per cent. 

Should you buy, sell or hold Britannia shares post Q3? 

Emkay Global maintained a 'Reduce' rating on Britannia with a target price of Rs 4,675 per share.  

 

The brokerage sees the lower staff costs in Q3 as a one-off event which helped the company report better margins and earnings. It believes with limited pricing, the margin stress persists for the coming quarter. 

 

Morgan Stanley maintained 'Equalweight' rating on the stock with a target of Rs 5,157 per share. Macquire iterated an 'Underperform' rating with a target of  Rs 4,500 per share.