Britannia Q2 Results: Revenue, Profit Rise As Sales Jump Amid Unlocking
Biscuit maker Britannia Industries Ltd.’s quarterly profit and revenue rose as sales increased after India eased the coronavirus lockdown curbs.
Net profit rose 23% year-on-year to Rs 494.93 crore in the quarter ended September, according to the company’s exchange filing. That compares with a Rs 503.4-crore bottom line estimated by analysts tracked by Bloomberg.
- Revenue rose 12% to Rs 3,419.11 crore against the estimated Rs 3,562.7 crore.
- Operating profit jumped 37% to Rs 675.39 crore.
- Operating margin expanded to 19.8% from 16.1%, above the consensus estimate of 18.8%.
While the government has ended the lockdown, it will take a while for the situation to normalise, Varun Berry, managing director of Britannia Industries, was quoted as saying in a statement on Monday. “We’re keeping a close watch on macroeconomic factors, changes in laws, evolving consumer behaviour and are framing our medium-term strategy laying out scenarios to deal with this dynamic environment.”
The company sustained a large part of its efficiency gains that it witnessed in the previous quarter such as those in its supply chains, wastage reductions and fixed-cost leverage.
“These measures helped us sequentially sustain the shape of our business and record a massive 390 bps (basis points) increase in operating profit during the quarter vs. last year,” Berry said.
During the July-September quarter, Britannia got its full range of products to the market, focused on efficient distribution, improved the fiscal health of its distributors and inched closer to normalcy in its advertisement and promotions.
The company witnessed moderate inflation in the prices of key raw materials and expects prices to remain stable following a positive outlook on monsoon and harvest season.
Raw material costs, including those of wheat and sugar, rose 16.2% year-on-year to Rs 1,812.45 crore, it said.
On Monday, shares of Britannia Industries rose 0.7% to 3,769.15 apiece on NSE while the benchmark Nifty ended the day 0.94% higher at 11,873.05 points. The quarterly results were declared after market hours.