Britannia Q2 net up 36%

Britannia Industries Ltd (BIL), the publicly held major in the bakery and dairy space, has posted a healthy 36.4 per cent growth in its net profit to Rs 58.9 crore for the second quarter ended September 30 as compared to the corresponding quarter of last year. The growth in bottom line has been driven by good sales, lower interest costs and growth in other income. The company reported an increase of 9.5 per cent in its consolidated revenue of Rs 1,542.6 crores on three-four per cent volume growth, product mix and price increases, while Ebitda grew 17 per cent to Rs 74 crore.

Vinita Bali, MD, said: “"On a consolidated basis, the dairy business and global business have been accretive to top line. Despite an Rs 85-crore increase in input costs, operating margins improved because of revenue and cost management and innovation during the quarter." "

Ronald Siyoni, analyst with KR Choksey believed that the company took price hikes of 6-7 per cent. "Consequently increase in raw material costs got offset leading to increase in gross margin by 168 bps YoY. Additionally higher conversion charges (up 17 per cent YoY), ASP expenses (up 17 per cent YoY), and other expenditure (up 17 per cent) was partially offset by lower employee costs (down 23 per cent YoY) leading to subdued growth in EBITDA margins by 30 bps YoY to 5.3 per cent," Siyoni said.

Britannia Industries, which is owned by the Mumbai-based Wadia Group, has been constantly innovating on a range of its products building a sturdy portfolio in the health & wellness and delight & lifestyle segments, besides having a growing presence in the breakfast, healthy snacking and dairy business.

"Britannia industries continue to report healthy top line growth driven by product mix, healthy volumes and judicious price hike. With improvement in product mix (led by innovations & decrease in proportion of Glucose in the overall biscuit segment), stepping up of cost cutting initiatives across the value chain, leveraging the synergies across segments and judicious price hikes we expect margins to improve going forward. We expect Britannia’s revenue & EPS to grow at healthy CAGR of 13 per cent and 24 per cent respectively over FY12-14E," Siyoni added.

Britannia's stock gained 1.5 per cent on the NSE to close at Rs 479.95 a share on Tuesday.