Britannia Industries Surpasses Expectations with 19.6% Q2 Profit Growth

Britannia Industries has reported its fiscal second-quarter earnings, surpassing expectations with a profit of Rs 586.50 crore, marking a 19.6% increase compared to Rs 490.58 crore during the same period in FY23. The company's revenue from operations reached Rs 4,432.88 crore, reflecting a 1.2% growth from Rs 4,379.61 crore in Q2FY23. Britannia's EBITDA stood at Rs 872.4 crore. According to a CNBC TV18 poll, market expectations were for a Q2 profit of Rs 544 crore and revenue of Rs 4,511 crore.

Britannia's consolidated sales for the quarter ending on September 30, 2023, amounted to Rs 4,370 crore. While the year-over-year sales growth was 1%, the growth over the past 24 months was an impressive 23%. Britannia's operating profit reached Rs 801 crore, indicating a 21% increase from the previous year, with a remarkable 24-month growth rate of 58%.

Varun Berry, Vice Chairman & Managing Director of Britannia Industries, expressed satisfaction with the company's performance despite the challenges posed by a two-year period of high inflation. He highlighted the success of recent innovations such as Jim Jam Pops and 50-50 Golmaal, which have contributed to a strong performance. Britannia also introduced new cheese formats during the quarter, expanding its presence on retail shelves. The company remains optimistic about its potential in rural markets, as it continued to expand its distribution in rural areas despite reported economic slowdown in these regions.

Britannia Industries is actively utilizing technology to enhance decision-making processes and improve distribution reach. Berry mentioned the progress in building technologically advanced factories, including the commercialization of a new Greenfield facility in Bihar during the quarter, along with recent additions in Uttar Pradesh and Tamil Nadu. With plans for capacity and capability enhancements at the Ranjangaon Food Park, the company aims to boost productivity and competitiveness in these growing markets.

Regarding pricing strategies, Berry noted that, in response to softened commodity prices and competitive pricing activity in certain categories, Britannia adjusted pricing strategically in some of its key brands and stock-keeping units (SKUs). This move contributed to the brand's market recovery during the quarter. However, he also acknowledged the volatility in global commodity prices due to ongoing strife in the Middle East and Russia. Britannia's strategy remains focused on gaining market share while maintaining profitability, while closely monitoring the evolving global situation and its potential impact on the business.