Britannia Bets On 'Accelerated Cost Efficiencies' As West Asia Tensions Weighs On Outlook

Britannia Industries said it will rely on "accelerated cost efficiency initiatives" and disciplined margin management to navigate geopolitical uncertainties in West Asia after reporting double-digit profit growth for the June quarter.

The FMCG maker posted a consolidated net profit of Rs 593 crore, up 14.1% year-on-year, while consolidated sales rose 9.5% to Rs 4,964 crore. On a standalone basis, sales increased 10% from a year earlier, according to the company's earnings release.

Commenting on the results, Managing Director and Chief Executive Officer Rakshit Hargave said the quarter began with conflict in West Asia, resulting in a sharp increase in fuel costs and freight charges across both domestic and international operations.

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"The year started with West Asia conflict, leading to a steep increase in cost of fuel and shipment charges across our domestic and international businesses, which we've been able to navigate well during this quarter, delivering a healthy volume and value growth while also gaining ground against competition, with profits growing ahead of topline in double-digit over last year," Hargave said.

He added that the company exited the quarter with mid-teen revenue growth, supported by rapid expansion in e-commerce, robust growth in general trade and higher spending on advertising, promotions and influencer-led campaigns.

Britannia said innovation continued to drive demand, citing launches such as the Dubai Kunafa Croissant, while regional campaigns, including the Milk Bikis Thirukkural initiative in Tamil Nadu, helped deepen consumer engagement. The company also said its international business recovered sequentially as supply-chain constraints eased towards the end of the quarter.

Looking ahead, Hargave said Britannia would continue monitoring geopolitical developments and crude oil prices.

"While we continue to closely monitor the evolving geopolitical situation in West Asia and crude oil volatility for potential impact on international operations and domestic input costs, we will remain agile in our actions to deliver healthy, sustainable revenue growth amidst an improving domestic demand environment, driven by sharp innovation, strong brand investments, and disciplined margin management through accelerated cost efficiency initiatives," he said.

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Separately, Britannia reported a steady operational performance for the June quarter, although earnings came in slightly below Street expectations.

According to Bloomberg consensus estimates, the company posted a consolidated net profit of Rs 591 crore, below the estimated Rs 606 crore, while revenue from operations rose 8.2% year-on-year to Rs 5,000 crore, broadly in line with expectations.

EBITDA increased 11% to Rs 840.4 crore, but missed analysts' estimate of Rs 871 crore. EBITDA margin expanded 40 basis points to 16.8%, compared with 16.4% a year earlier, though it remained below the Street estimate of 17.4%.

Britannia shares ended 0.66% lower at Rs 5,404 on the BSE ahead of the earnings announcement.

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