Britannia Q2 results: Revenue climbs 9% to Rs 3,399 crore

Bengaluru: Britannia Industries on Monday posted a 6% fall in standalone net profit for the second quarter from a year earlier when a lower tax outgo had boosted its performance, even as revenue rose 9%.

The maker of Good Day and Tiger biscuits said distribution services improved with relaxation of lockdown, but the situation would take time to normalise.

The company posted a net profit of Rs 462 crore on revenue of Rs 3,299 crore for the quarter ended September 30.

“In this quarter, we got our full range of products to the market, focussed on efficiency in distribution, followed continuous replenishment system of distribution, improved the health of our distributors and inched closer to normalcy in advertisement and promotions,” managing director Varun Berry said in a stock exchange filing.

The cookie maker expects raw material prices to be stable, helped by good monsoon and harvest. Supply chain efficiencies, reduction in wastage and fixed costs leverage helped it increase operating profit by 3.9 percentage points in the past quarter.

“Britannia’s Q2FY21 performance was slightly lower than our as well as Street expectation,” said Kaustubh Pawaskar of Sharekhan by BNP Paribas, noting that growth normalised in the second quarter due to easing of lockdown regulations.

“High single-digit to low double-digit volume growth is much better than pre-Covid level volume growth of low single digit. The OPM (operating profit margin) continues to expand substantially led by benign input prices and operating efficiencies. Better monsoon and higher agri production would help raw material prices to remain stable in the coming quarters,” added Pawaskar.

In the regulatory filing, Britannia said it was framing a medium-term strategy by keeping a close watch on macroeconomic factors, changes in laws and evolving consumer behaviour post-lockdown.

The Wadia-owned company had posted eight-year high sales growth during the pandemic quarter ended June, driven by at-home consumption and stockpiling but had said this expansion was difficult to maintain. The company had said net profit rose to Rs 516 crore from Rs 250 crore in the year earlier in the fiscal first quarter, when sales increased 25% to Rs 3,307.21 crore.

The lockdown during the first quarter hurt most segments but was good for companies such as Britannia, analysts had said. Families were confined to their homes even before the government imposed a nationwide lockdown on March 25 because of the Covid-19 outbreak, leading to pantry stocking. During the early part of the shutdown, purchases were confined to essentials, including the biscuits, bread and dairy products that the company makes.