Britannia Industries Q2 Results: Profit Beats Estimates, Margin Expands
Britannia Industries Ltd.'s quarterly profit rose, beating estimates, aided by price hikes.
Net profit of the maker of Good Day and Tiger biscuits rose 28% over the previous year to Rs 493.28 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 425.5-crore consensus estimate of analysts tracked by Bloomberg.
Britannia Industries Q2 Highlights (YoY)
Revenue rose 21% to Rs 4,379.61 crore, against an estimate of Rs 4,083.27 crore, in what is the company's highest quarterly revenue.
Operating profit rose 27% to Rs 711.7 crore against analysts' estimates of Rs 605.63 crore.
Operating margin expanded to 16.3% from 15.5%, beating the consensus forecast of 14.8%.
The cost of raw materials consumed rose 17.3% to Rs 2,245.94 crore.
"Our go-to-market strategy and increase in distribution reach have converged to deliver robust top line growth, aided by a mid-single digit volume growth," said Varun Berry, the company's managing director.
Britannia's market share reached a new 15-year high in Q2, he said.
"Our direct distribution jumped to 26 lakh outlets, with an addition of four lakh outlets in the last six months. We continue to make strides in our rural journey, and we now have appointed 28,000 rural preferred dealers, which has led to consistent market share gains," Berry said.
In Q2, commodity inflation remained high on the back of rising prices in flour and milk products, the company said in a statement.
"In this dynamic environment, as a result of our pricing actions and intensified cost efficiency program, we have been able to improve our operating margins beyond pre-Covid levels."
In comparison, the profits of FMCG firms like Hindustan Unilever Ltd. and Nestle India Ltd. also rose in this quarter, aided by price hikes. However, inflationary pressure continued to weigh on margins.
For ITC Ltd., inflationary headwinds manifested in subdued consumption expenditure with FMCG volumes, excluding cigarettes, coming under pressure.
Shares of Britannia Industries closed 1.49% higher on Friday against a flat benchmark Nifty 50. The results were declared after market hours.
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