Britannia Industries Q1 Results: Net Profit Misses Estimates On Higher Costs
Britannia Industries Ltd.’s first-quarter profit rose but missed estimates as its margin came under pressure because of higher raw material prices.
Profit attributable to owners of the maker of Good Day and Tiger biscuits was up 6.9% sequentially to Rs 389.6 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 412.1-crore consensus estimate of analysts tracked by Bloomberg.
Revenue rose 8.7% to Rs 3,403.5 crore, surpassing the estimate of Rs 3,171.1 crore. "Our brands were back on air and our full range of products is in the market as the supply chain impact wasn’t as severe as the first wave of the pandemic," the company said in a statement. During the quarter, Britannia launched 50-50 Potazos in the northeastern market.
“Second wave of Covid-19 struck the country hard followed by lockdowns imposed by various state governments," Varun Berry, managing director of Britannia was quoted as saying in the company’s exchange filing. "We witnessed evolving nature of the pandemic as well as consumer sentiment and behaviour.”
Britannia's operating profit rose 9.6% to Rs 553.8 crore, while Ebitda margin remained flat at 16.3% compared with 16.1% in the preceding quarter.
“On the cost front, we continued to witness increase in the prices of palm oil and crude,” Berry said. “In light of hardship to the consumers owing to the pandemic, we were cautious on pricing but aggressive on cost efficiencies.”
The company will take calibrated price increases as the situation normalises, said Berry.
Among the consumer goods makers on the Nifty 50 that have announced results so far for the April-June quarter, Nestle India Ltd.’s profit and revenue fell sequentially, and margin contracted.
India’s largest FMCG company, Hindustan Unilever Ltd., too, saw its earnings and revenue decline and margin narrow. The company said it would need to navigate the next couple of quarters of “very high inflation”.
Shares of Britannia closed 0.6% up before the results were announced compared with a 0.1% fall in the benchmark Nifty 50.