Britannia Q3 Results: Profit Meets Estimates On Lower Tax Expense

Britannia Industries Ltd.’s quarterly profit met estimates as tax expenses fell.

Net profit rose 24 percent year-on-year to Rs 372.6 crore, the maker of maker of Good Day and Tiger biscuits said in an exchange filing. That compares with the Rs 362-crore consensus estimate of analysts tracked by Bloomberg.

The company’s tax expenses fell 24 percent over a year earlier to Rs 127.3 crore.

The Wadia Group company’s revenue rose 5 percent to Rs 2,982.7 crore, in line with the Rs 3,030-crore forecast.

Britannia managed to keep up with analysts’ expectations even as value growth—a combination of volumes and price-led expansion—for India’s consumer goods makers, according to Nielsen India estimates, slowed for the fifth straight quarter.

“We had a decent quarter in the face of an economic slowdown,” Varun Berry, managing director of Britannia said in the media statement. “We chose to focus on strengthening the building block of the business rather than pushing sales in the face of a low offtake scenario.”

Berry said a series of steps helped them mitigate the slowdown impact.

• We continued to expand the width and depth of distribution but additionally focused on improving distributor health and keeping the supply chain efficient.
• Further, during this phase of sluggish demand, we continued to invest in enhancing our brand equity through focused product campaigns.
• We are consolidating our new launches and focussing on the depth of distribution.
• Our accelerated drive on cost efficiencies, reduction in and leverage on fixed costs helped us improve the shape of our business and deliver highest-ever operating profit in the quarter.

“We are hopeful that in this country, slowdown can only be short-lived and our focused efforts on and processes will help us get back on high growth trajectory and consistently enhance value for all our stakeholders,” Berry said.

Nielsen had noted that rural demand stabilised during the quarter but urban consumption weakened. India’s largest consumer goods maker Hindustan Unilever Ltd., too, reported a better-than-expected volume growth at 5 percent during the quarter, even as it remained flat for the third-straight quarter.

Britannia’s earnings before interest, tax, depreciation and amortisation rose 11 percent to Rs 502 crore. Its Ebitda margin expanded to 16.8 percent from 15.9 percent last year.

The board also approved issuance of commercial paper worth Rs 800 crore. Shares of Britannia remained flat at the close of Friday’s trade compared with a 0.33 percent drop in the benchmark Nifty 50 Index.