Britannia Industries records 23% YoY fall in Q2 PAT

Britannia Industries reported 22.9% fall in consolidated net profit to Rs 384.22 crore despite a 5.5% rise in total revenue from operations to Rs 3,607.37 crore in Q2 FY22 over Q2 FY21.

Total expenses during the quarter rose by 11.2% YoY to Rs 3,138.15 crore due to higher raw material costs (up 8.3% YoY), higher employee expenses (up 14.2% YoY) and higher finance costs (up 30.7% YoY).

Profit before tax in Q2 FY22 stood at Rs 522.84 crore, down by 22% from Rs 670.18 crore in Q2 FY21.

Total tax expense fell by 19.4% YoY to Rs 141 crore during the period under review.

Inventory turnover ratio was 40.87 in Q2 FY22 as against 47.75 in Q2 FY22.

Operating margin was 14.09% in Q2 FY22 as against 18.34% in Q2 FY22.

While the company's consolidated net profit has fallen by 1.4%, total revenue from operations have risen by 6% in Q2 FY22 as compared with Q1 FY22.

Varun Berry, Managing Director, said: In line with our strategy, we continued our focus on increasing direct distribution and improving our rural footprint. In this year, we saw higher growth in market share and as a result we significantly reinforced our market leadership.

On the cost front, the global economy continued to witness supply led constraints across various input materials fuelling inflation. As a result, we are witnessing unprecedented inflation in market prices of palm oil @ 54%, industrial fuel @ 35% and packaging materials @ 30% leading to an overall inflation in the quarter of approximately 14%.

While we have been able to partially mitigate the impact through strategic forward covers and accelerated cost efficiency programs, we have also initiated necessary price increases across the portfolio all of which will address the cost push and normalise profitability.

Britannia Industries is one of India's leading food companies. Its product portfolio includes biscuits, bread, cakes, rusk, and dairy products including cheese, beverages, milk and yoghurt.

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