Britannia Industries reported lower-than-expected June-quarter profit growth amid heightened competition and inflationary pressures. Revenue growth for Q1FY26 was robust amid an uptick in consumption in urban and rural markets, coming after muted growth seen in the last few quarters. The results were declared after market hours on Tuesday.
Revenue growth strong, but margins under pressure
The company reported a 3% year-on-year growth in consolidated net profit to Rs 521 crore compared to the consensus estimate of Rs 569 crore by Bloomberg. The consolidated revenue growth came in at nearly 9% to Rs 4,622 crore, which compares favourably with Street estimate of Rs 4,611 crore for the quarter.
Earnings before interest tax depreciation and amortisation (Ebitda) stood at Rs 757 crore for the June quarter, lower than the estimated Rs 814 crore by Bloomberg, and flat when compared to last year. Ebitda margins for Q1 stood at 16.4% versus analysts’ average estimate of 17.7% for the period. It was down 130 basis points when compared to last year.
Continued inflation in key raw materials and higher employee benefit expenses has hurt the company’s operating margins in Q1, sectoral experts said, which is at a multi-quarter low.
Focus on premiumisation and core brand strategy
Varun Berry, executive vice-chairman, MD & CEO, said, the company’s sales performance was marked by its focused execution strategy in key states. This entailed maximising value from existing outlets, enabling more agile servicing to key stores, and driving operational efficiencies across its distribution network.
“Continuing our journey of premiumisation through innovations and exciting new launches across our premium biscuit portfolio enriched our offerings to consumers while we continued building our core brands through focused media and marketing interventions,” he said.
Britannia closed the day, down 2.66% versus the previous day’s close, on the BSE, amid weak market conditions, at Rs 5,631.35 apiece. The broader BSE Sensex was flat at 80,719.25 points.