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We downgrade Britannia to REDUCE from Add, cutting Sep-25E TP to Rs5,200 from Rs6,750 earlier.

With a downside of 1% from the CMP, we downgrade the stock from BUY to HOLD

Compared to Bloomberg consensus, sales were 2% lower, EBITDA 12% lower as margin came in 200bps below expectations. Volumes +8.5%

Emami’s reported fair sales growth in 2Q FY25 as higher food inflation negatively affected discretionary consumption. Management expects demand to improve in the second half of the financial year, driven by a predicted good winter season.

Britannia Industries (BRIT) posted revenue growth of 5% YoY in 2QFY25 (est. 7%) and volume growth of 8%.

Britannia’s Q2FY2025 numbers missed expectations due to lower-than-expected OPM at 16.8% (versus expectation of 19%) dragged down PAT by 9% y-o-y. Volume growth sustained at 8% better than large peers.

We remain positive on Emami, given the focus on execution to drive growth (with a professional team in place), the rebound in rural growth, increased thrust on urban (26% sales from Modern trade and Ecommerce), and hopes of a better season ahead.

With Rs8.9bn revenue (vs. the Street’s Rs9.1bn estimate) and EBITDA atRs2.5bn (Rs2.5bn), Emami’s Q2 was broadly in line with estimates.

Emami reported 3% YoY sales growth in 2QFY25 (est. 5%). The domestic business grew 2.6% YoY, led by volume growth of 1.7% (est. 3%).

Emami’s Q2FY2025 operating performance missed the mark with domestic volume growth coming at 1.7% versus expectations of 3-4%. Consolidated OPM came in-line at 28.1%.