Britannia Industries Q1 Results: Profit Rises 36%, But Misses Estimates

Britannia Industries Ltd.'s profit rose in the first quarter of fiscal 2024 but missed analysts' estimates.

The consolidated net profit of the Marie Gold biscuit maker increased 36% over the previous year to Rs 455.4 crore in the April-June quarter, according to an exchange filing on Friday. That compares with the Rs 513.1 crore consensus estimate of analysts tracked by Bloomberg.

Britannia Q1 FY24 Highlights (Consolidated, YoY)

• Revenue up 8% to Rs 4,010.7 crore, as against an estimate of Rs 4,103.9 crore.

• Operating profit rose 38% to Rs 688.8 crore, as compared with an estimate of Rs 743.5 crore.

• Margin at 17.2% versus 13.5%. Analysts had forecast it at 18.1%.

Local competition intensified as commodity prices softened, said Varun Berry, the company's executive vice-chairman and managing director. "In view of that situation, certain price corrections were initiated to remain competitive and continue to drive top-line while maintaining profitability."

Robust distribution gains coupled with requisite investments in brands partly aided Britannia's revenue growth, according to Berry. "We continued to display diligent market practices and strong on-ground execution, which also reflects in our rural performance in an overall tepid rural demand."

Other consumer goods makers that have so far announced their quarterly results—including Hindustan Unilever Ltd., Dabur India Ltd., Marico Ltd. as well as Nestle India Ltd.—have also called out the resurgence of local brands, which struggled in the aftermath of Covid-19 and how they are treading on the turf of FMCG giants.

According to a recent study released by researcher Kantar, the volume growth of local brands surpassed that of national brands significantly over the 12-month period ended April 2023. Local brands, defined as those operating within a single market, witnessed 12.7% volume growth, while national brands posted an 8.2% rise during the period.

HUL, the country's largest consumer goods maker, said it lost some market share in certain pockets of the portfolio, primarily in the mass segment.

Britannia said it has progressed well in its journey of building technologically superior factories. "Our new greenfield in Tamil Nadu and Uttar Pradesh were efficiently scaled up. With capacity and capability enhancements planned in Ranjangaon Food Park, we are well-poised to extract productivity and enhance competitiveness in these markets."

Shares of Britannia closed 0.27% higher at Rs 4,803 apiece before the results were announced, as compared with a 0.75% gain in the benchmark BSE Sensex. The results were declared after market hours.