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Shares of Britannia Industries traded lower on Thursday as investors on Dalal Street remained cautious ahead of the company’s financial results for the April to June 2022 period due to be released later in the day.

Britannia shares shed more than a percent in early deals and were trading 0.57 percent lower at Rs 3747.60 on BSE at 9:45 am.

The downtrend in the stock comes as a CNBC-TV18 poll of analysts has pegged the fast-moving consumer goods company to post growth led by price hikes it took during the quarter. It is expected to record a profit of Rs 410 crore for the quarter under review. This is almost a 6 percent rise when compared to the corresponding period in the previous financial year.

The company is expected to register a revenue of Rs 3,750 crore for the June 22 quarter, which is a growth of 10.2 percent on a yearly basis.

However, analysts believe Britannia's business growth is led by market share gains, new product launches, and distribution expansion because the margin — the amount by which a business's revenue exceeds its costs — is likely to squeeze by 90 basis points to 15.4 percent against the year-ago period. Gross margins may contract 100-150 bps as compared to same period last year amid the rise in costs, according to the poll.

The domestic volume growth is expected to be 0-2 percent as against a percent in the same quarter, analysts suggest. The price hikes and grammage cuts shall aid in mitigating inflationary pressure, they said.

The analysts expect Britannia's EBITDA — or earnings before taking into account the impact of components such as taxes and interest — to increase four percent on year to Rs 576 crore.

The Street will closely watch the company’s commentary on inflation cool-off and margin trajectory. The update on adjacencies will also be tracked as demand for on-the-go products is likely to have improved.

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