Margin pressure to weigh on Britannia stock's near term prospects

Though valuations are reasonable, the stock lacks near term triggers

A muted operating performance in the September quarter of financial year 2021-22 (Q2FY22) due to the sharp rise in input costs offset the better-than-expected top line performance of India’s largest biscuit maker, Britannia Industries. Revenue growth at 6 per cent over the high base in the year-ago quarter was healthy, aided by price hikes, new launches, rural expansion, and revival in demand.

Growth is expected to remain strong as demand picks up, the out-of-home segments see traction and distribution is enhanced, but the Street will keep an eye out for the trend in margins.

Profitability at the gross level was down 485