Britannia reported a 47.1% year-on-year (y-o-y) rise in consolidated net profit for the March quarter (Q4) to Rs 559 crore, on the back of softer commodity prices. Bloomberg consensus estimates had pegged net profit at Rs 503 crore. Revenue grew 13.3% y-o-y to Rs 4,023 crore, led by price growth. Bloomberg consensus estimates had pegged revenue at Rs 4,064 crore.
Volume growth, according to Amnish Agarwal, head of research at brokerage Prabhudas Lilladher, came in at 1% for Q4, which was below expectations.
“Although revenue and volumes were below our estimates, margins were a strong beat on our expectations,” Agarwal said. “We estimate volume growth of 1% indicating higher share of premium products. Price hikes in earlier quarters with moderating inflation and internal efficiencies enabled sharp margin expansion,” he said.
For FY23, Britannia reported a 52.3% y-o-y rise in consolidated net profit to Rs 2,322 crore. Revenue from operations increased 15.3% y-o-y to Rs 16,300.55 crore.
Operating profit grew 47.5% y-o-y to Rs 736 crore in Q4 and for FY23, it rose 30% to Rs 2,605 crore.
While gross margins expanded 688 bps versus last year to 44.9% in Q4, operating margins expanded 442 bps y-o-y to 19.9%.
The biscuit maker reported earnings after the markets closed. The stock ended 0.85% higher at Rs 4,623.90 a share on the BSE, which is a three-month high.
“We delivered robust growth this quarter on the back of significant distribution gains, which reflects our execution strength across businesses and channels,” said Varun Berry, vice chairman and managing director of Britannia.
The company said that input prices softened on the back of a correction in prices of palm oil and packaging materials, while wheat flour continued to trend higher.
“Our intensified cost efficiency program coupled with moderation in commodity inflation led to a healthy operating margin in this quarter,” Berry said, adding that the company remains vigilant of the competitive actions in the marketplace and is closely monitoring commodity price trends, especially around wheat and sugar.
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The company will undertake appropriate pricing actions to remain competitive and drive market share growth, he added.
In other updates, the company has commercialised 2 greenfield units in Q4 in Uttar Pradesh and Tamil Nadu, and expanded the capacity of its unit in Odisha for biscuit manufacturing.
It has also commercialised 3 new lines to manufacture rusk in the quarter under review.
“This is in line with our strategy to make in-house, our exclusive range of products and further enhance productivity,” Berry said.