Britannia\u2019s Q1 FY19 revenue (grew 12.4% y-o-y) was in line while Ebitda (up 18.5% y-o-y) and PAT (up 19.6% y-o-y) came below estimates. Britannia highlighted FY19 as a year of innovation with renovation of core, innovations in adjacencies, scaling up dairy and entry into new geographies. As execution remains strong, current steps should drive top line growth, but pace of margin expansion might slow. With valuations baking in all positives, we retain a hold with a TP of Rs 5,850. Britannia saw 13.6% y-o-y domestic volume growth (on a base of 3% y-o-y) as standalone sales increased 13.6% y-o-y. Standalone gross and Ebitda margins jumped 54 bps y-o-y and 52 bps y-o-y respectively. Consolidated sales growth at 12.4% y-o-y was lower due to flattish growth in international business (slowdown in Africa and Middle East) and dip in dairy business (moving towards value added products). Consolidated gross margin, however, jumped 204 bps y-o-y with 79 bps y-o-y expansion in consolidated Ebitda margin. Innovation will be across segments during FY19. Key brands such as Good Day, 50:50, Bourbon, Marie Gold, Nutri Choice etc. will be relaunched and backed by new advertising. Apart from this, premium brands will be democratised to increase access to all consumers (launched at Rs 15 and Rs 20 for pack of Wonderfulls and Chunkies respectively). Management appears very gung-ho about the potential to scale up cake and rusk given low penetration (cake is one-fifteenth the size of biscuit in India). The segment will be transformed with new innovations and creation of super brands (re-branded Britannia Rusk to Toast Tea). Dairy, cheese, yogurts, drinks and dairy whitener will be the focus areas of innovation and growth.