Britannia Shares Jump as Profit Beats, Demand Outlook Brightens
Britannia's shares rose 4.7% after strong Q1 profit and resilient demand signals, with analysts reaffirming growth outlook.
Shares of Britannia Industries climbed as much as 4.7% on Friday, hitting a three-month high, after the biscuits maker reported a solid rise in quarterly profit and indicated that consumer demand remains robust. The stock touched 5,660 rupees, buoyed by the company's earnings and an optimistic outlook for domestic sales.
Britannia's consolidated net profit grew 13.4% year-on-year to 5.91 billion rupees for the June quarter, while revenue from operations rose 8.2% to 50 billion rupees. The company attributed the performance to steady consumer spending, which helped offset volatile commodity prices and supply-chain disruptions.
"Demand is holding up... we have exited the quarter on a very positive note," said Managing Director and CEO Rakshit Hargave during an earnings call. The company also flagged geopolitical tensions in West Asia and volatile crude oil prices as potential risks that could push up input costs.
To protect margins, Britannia accelerated cost-efficiency measures, including packaging optimisation, waste reduction, procurement efficiencies, and increased use of alternative fuels and renewable energy. Although industrial fuel and laminate costs rose sharply during the quarter, the company said strategic hedging and these initiatives would help cushion the impact. Total expenses increased 7.3% to 42.62 billion rupees.
Analysts responded positively to the results. Macquarie noted that improving domestic demand and market share gains would be key near-term growth drivers. Investec said easing supply-chain constraints could support margins and maintained a "hold" rating with a price target of 5,851 rupees. Nomura, which kept a "buy" rating and a price target of 6,500 rupees, said Britannia's low-single-digit price hikes supported volume growth broadly in line with expectations.