Britannia Sees Clear Signs Of Slowdown In Rural Markets As Net Profit Rises 19%

Britannia Industries Ltd on November 1 declared a surge of 19.55% in its consolidated net profit to Rs 586.50 crore for the September quarter of FY24 as compared to Rs 490.58 crore reported in the corresponding quarter of last year.

Britannia Industries' total revenue from operations soared 1.21% to Rs 4,432.88 crore from Rs 4,379.61 crore declared last year, as per the regulatory filing. Its earnings before interest, depreciation, taxes and amortisation (EBIDTA) or operating margin declared at Rs 872.4 crore in the September 2023 quarter, up 22.5% as against Rs 711.7 crore declared in the corresponding period last year.

However, the FMCG major was quick to raise apprehensions over clear signs of a slowdown in rural economy.

"We delivered a good performance in a challenging environment on the back of 2 years of high inflation. Our innovation this quarter was led by Jim Jam Pops and 50-50 Golmaal, delivering a robust performance. We also launched differentiated cheese formats this quarter making focused inroads to retail shelves. Our potential in rural continues to remain high and hence, expansion in rural distribution continued despite reported rural slowdown. We have progressed well on our digital journey with digital marketing gaining momentum and leveraging digitalization to enhance decision making & fine-tuning distribution reach, said Varun Berry, Vice Chairman & Managing Director.

"As the commodity started to soften this quarter, we have seen pricing activity by competition in certain categories. To ensure that we remain competitive, we took strategic pricing corrections in some of our key brands & SKUs. As a result, our market share recovered this quarter. With the ongoing strife in the Middle East & Russia, the global commodity prices remain volatile. We are being watchful of the situation and its impact on our business. Our strategy will remain focused on driving market share while sustaining profitability," added Varun Berry.

On the sustainability front, we stay committed to our ESG framework of People, Growth, Governance and Resources and shall continue to focus on our initiatives to build a Sustainable Profitable business, said Varun Berry.

It is going to be a consumption-led growth here. And if you were to look at it by categories while there are categories like Glucose, Marie and some of our cookies which have got reasonably high penetration between 40% to 60%, there are lots of categories where we have less than 20% penetration in households, he said.

Current market price of Britannia Industries share on BSE is Rs 4548.05 per share with intraday gain of 0.42%. Its 52-week high price is Rs 5268.55 per share and 52-week low price is Rs 3710.35 per share, respectively. The company has a market capitalisation of Rs 1,09,548.11 crore. Britannia Industries shares declined 5% in last 3-months and soared 21% in last 1-year. in last 3-years, Britannia Industries stock surged 34%.