Britannia zooms 10% on robust Q2 revenue growth; enters Rs 1 trn m-cap club

In Q2FY23, Britannia's consolidated sales grew 22 per cent YoY and 19 per cent QoQ at Rs 4,338 crore, aided by a mid-single digit volume growth.

Shares of Britannia Industries hit an all-time high of Rs 4,181.40 on zooming 10 per in Monday’s intra-day trade after the company reported a robust revenue growth, with its market share reaching new 15-year high in the September quarter (Q2FY23).

The stock of the leading food company has surpassed its previous high of Rs 4,152.05, touched on September 14, 2021. A sharp rally in the stock price, has helped Britannia enter in league of Rs 1 trillion market capitalization (m-cap) club. The company’s m-cap touched Rs 1.01 trillion in intra-day trade today.

In Q2FY23, Britannia’s consolidated sales grew 22 per cent year-on-year (YoY) and 19 per cent quarter-on-quarter (QoQ) at Rs 4,338 crore, aided by a mid-single digit volume growth. The profit from operations jumped 30 per cent YoY at Rs 660 crore.

Consolidated gross margin expanded by 140bp YoY and 200bp QoQ to 38.9 per cent. However, lower staff cost (down 50bp YoY) and higher other expenses (up 120bp) restricted EBITDA margin expansion by 80bp to 16.3 per cent.

On cost & profitability front, commodity inflation remained on the boil on the back of rising inflation in Flour & Milk products, Britannia said. “In this dynamic environment, as a result of our pricing actions and intensified cost efficiency program, we have been able to improve our operating margins beyond pre-covid levels,” the company said. Meanwhile, the company said it have witnessed positive growth momentum over the last few month.

Analysts at Centrum Broking believe Britannia’s long term business  fundamentals are intact and growth  strategy is driven  by  expanding  footprint  in  middle  India  and  innovation  funnel  coupled  with  strong execution capabilities, striving for profitable growth.