Britannia Industries - Resilient Q2; Inflation At 14% Hit Margins: Centrum Broking
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Centrum Broking Report
Britannia Industries Ltd.’s Q2 FY22 results were below expectations. Off a high base, consolidated revenue grew 5.5% while Ebitda/profit after tax contracted 17.3%/22.5%.
Domestic volume grew just 2%. Normalisation of various channels and demand getting back led to revenue growth, while margins were impacted by sharp inflation in refined palm oil, milk and fuel.
Britannia's management expects on-the-go consumption in modern trade and institutional business to grow faster once normalcy sets in.
It alluded to its focus on strategic plans. Focus states grew 1.33 times the company average sales. Owing to ~14% inflation, gross margin slipped to 38.1% (down 527 basis points) and Ebitda margin to 15.5% (down 428 bps).
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