Britannia Q3 Results: Profit Dips On Muted Rural Demand, Competition

Britannia Industries Ltd.'s third quarter profit declined on account of a one-time gain in the base quarter, but met analysts' estimates.

The consolidated net profit of the Marie Gold biscuit-maker fell 40.4% over the previous year to Rs 555.6 crore in the October-December quarter, according to an exchange filing on Wednesday. That compares with the Rs 552.8-crore consensus estimate of analysts tracked by Bloomberg.

The biscuit-maker gained Rs 357.6 crore from a stake sale in the year-ago period. Profit before exceptional items and tax fell 2% to Rs 761.13 crore.

Britannia Industries Q3 FY24 Highlights (Consolidated, YoY)

• Revenue up 1.4% to Rs 4,256.3 crore, as against an estimate of Rs 4,296.2 crore.

• Operating profit rose 0.4% to Rs 821.09 crore, as compared with an estimate of Rs 813.1 crore.

• Margin at 19.3% versus 19.5%. Analysts had forecast it at 18.9%.

The quarter was marked with intense competition from regional peers and as continued weakness in rural spending owing to high cost of living.

"In a progressively recovering demand environment with heightened competition, our performance this quarter reflects our resilience and competitiveness," said Varun Berry, vice chairman and managing director at Britannia Industries.

The company "capitalised on the power of our brands with requisite investments" and took "judicious" price cuts, which helped in gaining market share, Berry said.

Britannia also partnered with more than 29,000 rural distributors during the quarter, further strengthening its reach.

"As a result, our focus states outperformed other regions in terms of growth, despite a generally subdued rural demand," according to Berry.

The international business "performed extremely well", generating double-digit growth across key markets, the company said in a statement.

The company will stay vigilant of the commodity prices and evolving geopolitical situation, said Berry. "We will continue to invest behind our brands and stay price competitive with a clear objective of driving market share while sustaining profitability."

Shares of Britannia Industries closed 2.14% lower on Tuesday, as compared with a 0.72% gain in the benchmark Nifty 50. The results were declared after market hours.