News

Published: August 5, 2023
Updated: August 5, 2023

"Britannia Reports Robust Q1 Results With 35% Net Profit Growth, Despite Missing Estimates"

Britannia Industries Ltd, a leading player in the FMCG sector, announced its Q1FY24 results, showcasing impressive growth in net profit despite missing analyst estimates. The company reported a consolidated net profit of Rs 455.45 crore, marking a substantial 35% increase compared to the same quarter last year. However, the profit sequentially fell by 18.3% from the previous quarter.

Strong Revenue Growth:

Britannia's revenue for the June quarter of FY24 stood at Rs 4,010.70 crore, reflecting an 8.36% increase from Rs 3,700.96 crore in the corresponding period a year ago. Despite this notable growth, the company reported a marginal 0.31% decline in revenue compared to the previous quarter.

Missed Estimates, But Positive EBITDA Performance:

While the revenue was largely in line with expectations, the net profit fell short of analyst estimates. According to a poll of brokerages, Britannia's net profit was expected to reach Rs 517 crore, and the revenue was projected to be around Rs 4101 crore. However, on a positive note, Britannia's Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) performed well, recording a growth of 37.6%. The EBITDA margin also saw a remarkable improvement, reaching 17.2%, up by 370 basis points.

Challenges and Strategies:

The company's Executive Vice Chairman & Managing Director, Varun Berry, highlighted the challenging economic conditions marked by unprecedented inflation. Despite this, Britannia successfully led pricing actions to offset inflationary pressures and maintain profitability. However, in the current quarter, commodity prices showed a slight softening, leading to intensified local competition. To remain competitive and drive revenue growth while ensuring profitability, Britannia initiated certain price corrections during this period.

Market Response and Share Price:

Following the earnings announcement, Britannia's share price closed at Rs 4802.55 on the NSE, recording a modest 0.08% increase. Despite the net profit missing estimates, investors' response was relatively positive, given the company's overall strong performance.

Britannia Industries' Q1FY24 results reflect its resilience amid challenging economic conditions. Despite missing net profit estimates, the company demonstrated a robust 35% growth, showcasing its ability to adapt and navigate market dynamics. Britannia's strategic pricing actions and focus on maintaining profitability amid fluctuating commodity prices position it well for future growth and sustained success in the highly competitive FMCG industry.