Britannia's Q2 fails to impress brokerages

Mumbai: Most brokerages have a neutral to bearish view on Britannia Industries after the company's margins in the second quarter were dented by cost pressures.

Britannia reported a 23% year-on-year decline in its consolidated net profit to ₹384.22 crore for the quarter ended September. The biscuit maker's consolidated revenue from operations rose 5.5% to ₹3,607.4 crore. The weak results weighed on the stock which fell 2.6% to ₹3,622.30 on Tuesday.

Retaining a neutral rating, Credit Suisse said Britannia's consolidated profit before tax fell 21% year-on-year which was significantly before estimates. Britannia's revenue growth slowed down and Ebitda margin compressed more than expected due to input cost pressures, said Credit Suisse.


Goldman Sachs and Nomura have retained a neutral stance.

ICICI Securities has retained a reduce rating. Meanwhile, JP Morgan and Morgan Stanley have retained overweight and equal-weight rating respectively.

While lower advertisement spends in FY21 have driven higher profit growth versus revenue growth, FY22 is likely to be a low profit growth year for Britannia, said ICICI Securities.