Britannia Industries Ltd. saw a boost in its second-quarter earnings for fiscal 2024, surpassing the expectations of financial analysts.
According to an exchange filing on Wednesday, the manufacturer of Marie Gold biscuits reported a 19.6% rise in its consolidated net profit for the July-September quarter, reaching INR 586.5 crore. This exceeded the analysts’ consensus estimate of INR 547.9 crore, as reported by Bloomberg.
The company’s revenue increased by 1.2% to INR 4,432.9 crore, falling short of the estimated INR 4,555.4 crore. However, the operating profit surged by 22.6% to INR 872.4 crore, surpassing the estimated INR 803.4 crore. This resulted in a margin of 19.7%, well above the expected 16.3%, as analysts had previously predicted it to be at 17.6%.
“We delivered a good performance in a challenging environment on the back of two years of high inflation,” Varun Berry, the company’s vice-chairman and managing director, said in a statement.
With the softening of commodity prices this quarter, the biscuit manufacturer implemented price reductions in certain prominent brands to maintain a competitive edge in the face of intense local competition. As a consequence, this move has had a partial impact on the growth of quarterly revenue.
With the ongoing geopolitical unrest in the Middle East and Russia, the global commodity prices remain in a state of persistent volatility.
“We are being watchful of the situation and its impact on our business. Our strategy will remain focused on driving market share while sustaining profitability,” he said.
“Our potential in rural (segment) continues to remain high and hence, expansion in rural distribution continued despite reported rural slowdown,” said Berry.
In the quarter, Britannia Industries initiated operations at its new greenfield facility in Bihar, further expanding its presence alongside recent expansions in Uttar Pradesh and Tamil Nadu.
“With capacity and capability enhancements planned in Ranjangaon Food Park, we are well poised to further extract productivity and enhance competitiveness in these growing markets,” Berry said.
Britannia Industries’ shares concluded Wednesday’s trading session with a 0.92% decrease, while the benchmark Nifty 50 experienced a 0.47% decline. The company’s results were announced after the market closed.
