Britannia puts Chennai land on block; net doubles

The company's consolidated net sales rose 14% to Rs 1,539.6 cr in the quarter ended June

The Britannia Industries stock on Monday jumped to a record high after the company announced its consolidated net profit for the quarter ended June nearly doubled to Rs 89.5 crore compared to the year-ago period, owing to lower expenses and higher prices. Operating profit more than doubled to Rs 128 crore.

Britannia shares closed at Rs 732 each on BSE on Monday, up 5.4 per cent. Earlier in the day, the shares had touched a record high of Rs 774.8. The company’s consolidated net sales rose 14 per cent to Rs 1,539.6 crore in the quarter ended June, compared to the corresponding quarter last year.

While sales of glucose biscuits have slowed through the last few quarters, Britannia has aggressively pushed its higher-margin cream biscuits and cookies. This, along with the relatively stable prices of commodities such as wheat and sugar, its raw materials, contributed to Britannia’s improved margins, said Edelweiss Securities analyst Abneesh Roy.

The company has decided to sell a 16-acre plot, which houses a factory of its, in Padi, Chennai’s industrial hub. According to information available, the company might sell the asset in two tranches — nine acres first, and the rest later. Managing Director Vinita Bali said Britannia was in the process of selling the Chennai facility, as this wasn’t efficient. Bangalore-based Shriram Properties is understood to be considering bidding for the property. It is also set to commission a facility for making biscuits in in Jhagadia in Gujarat by October. This would see an investment of Rs 40-50 crore, said Bali.