Shares of Britannia Industries Ltd slipped for the third consecutive trading session on Monday. It fell nearly 4 percent to an intraday low of Rs 3,125 apiece on NSE as revenue growth trajectory in results for the December quarter disappointed the market.
On Friday, the biscuit marker had reported a 23.26 percent increase in consolidated net profit at Rs 369.88 crore in the third quarter of 2019-20 from Rs 300.07 crore in the same period of the previous year.
Total revenue from operations for the quarter stood at Rs 2,982.7 crore, a 4.95 percent increase from a year ago against Rs 2,842 crore.
The company's management said that it saw moderate inflation in the prices of key raw materials for the bakery business, but the inordinate increase in milk prices adversely impacted the profitability of the dairy business.
The results were lower than street estimates.
Despite maintaining a 'Buy' rating on Britannia with a target price of Rs 3,455, JM Financial called the results a "disappointment."
"Britannia's Q3FY20 report was quite a disappointment. Revenue growth trajectory decelerated even though the base is now much more favourable. The pain in the environment seems to be really catching up hard," said the brokerage," it said.
"On the positive side, the other trigger that we were looking out for, 'Other Expenses' growth rate cooling off once costs of new factories and new businesses get into the base, did play out, though, and helped operating profit to still grow in double-digit despite a very disappointing topline performance," it added.