Revenue grew by 6.6% YoY in Q1 21/22, underperforming our expectations. Olympic posted Q1 21/22 revenue of BDT4,966mn against BDT4,658.7mn in the same quarter of the previous year. In the prior year, Olympic generated high revenue during the covid outbreak due to more sales of family pack biscuits and a shift in consumer preference towards packaged food. We believe, revenue has started to normalize from the higher base. Nonetheless, we believe the growth momentum will continue for the market leader in the coming years.
As the revenue growth has underperformed our expectations, we have decreased our revenue growth forecast to 10.0% YoY from 14.6% YoY for FY22.
NPAT fell by c28% YoY amid gross margin dent and higher opex. Olympic posted Q1 21/22 NPAT of BDT412.7mn (EPS of BDT2.09) against BDT570.1mn (EPS of BDT2.85), underperforming our expectations. 6.6% YoY revenue growth and 202bps YoY lower effective tax rate could not offset the effect of c312bps YoY GPM deterioration, c162bps YoY higher selling expense/sales, and c50mn YoY lower other income. Due to the higher price of commodities, GPM has fallen in Q1 21/22 on both year-on-year and quarter-on-quarter basis. But we believe, the dent is temporary and will recover with commodity price normalizing. We also expect selling expense/sales to improve with scale and change in product mix.
As the NPAT growth has underperformed our expectations, we have trimmed our annual EPS forecast by c18% to BDT10.26 from BDT12.47. This is because we revised down our revenue expectations and gross profit margin expectations from 30.6% to 28.3% for FY22. Due to high commodity price, gross margin dent might continue another few quarters which is why we have trimmed the forecast for FY22. However, from next year we believe the commodity price will start to normalize or Olympic will be able to pass through the cost which will improve the gross margin. Hence, our future outlook of Olympic remains strong (16.6% CAGR growth from 2020-21 to 2024-25).
We maintain our Buy recommendation for Olympic with decreased TP of BDT220 (ETR 37.6%) for June 2022. Olympic is currently trading at 17.4x trailing PE, which is c28% lower than the five-year median PE and c5% lower than three-year median PE. Our TP of BDT220 implies 21.4x 2022f PE and 2.1x FY2022f EV/Sales. We believe, Olympic being the market leader will be able to take maximum advantage of the shift in consumer preference towards packaged food soon. We reiterate Buy for Olympic.