Earnings report: Britannia Q2 results miss street estimates

On the cost front, the global economy continued to witness supply led constraints across various input materials fueling inflation

Britannia reported a 23 per cent year-on-year decline in its consolidated net profit to Rs 384.22 crore for the quarter ended September, which was below analysts’ expectations. 

Consolidated total revenue from operations, however, rose 5.5 per cent on-year to Rs 3,607.4 crore for the reported quarter, which was largely in line with estimates. 

Commenting on the performance, Varun Berry, Managing Director, said, “On the cost front, the global economy continued to witness supply led constraints across various input materials fuelling inflation. As a result, we are witnessing unprecedented inflation in market prices of palm oil - 54 per cent, industrial fuel - 35 per cent and packaging materials - 30 per cent leading to overall inflation in the quarter of 14 per cent.

He further adds, "We are confident that our resilient brands and strategic growth initiatives will hold us on a path of profitable share gain in the future as well." 

Growth in Market share 

During the quarter, the impact of the second wave of Covid-19 started diminishing, and the economic activity started picking up. However, inflationary trends remained worse around the globe, across sectors.

In line with their strategy, the company continued their focus on increasing direct distribution and improving its rural footprint. In this year, they saw higher growth in market share and as a result, they significantly reinforced their market leadership. 

Britannia launched Milk Bikis Classic in Tamil Nadu, to celebrate the 40th anniversary of the brand and expanded the presence of a very unique bridge snack product, Potazos, across the country. This quarter also saw the launch of Treat Stix and Marble Cake to create excitement in wafers and cake categories. 

Results were out after market hours yesterday, but the market has reacted negatively to the results. At 3.30 PM the stock is 2.60 per cent down from morning closed at Rs 3,621.00 on NSE