Britannia Q1 profit misses estimates, sees early signs of urban recovery

Britannia had previously flagged rise in popular demand for packaged food and confectionery items such as croissants, wafers and flavoured shakes

Britannia Industries posted first-quarter profit below estimates on Tuesday, but the Indian biscuit maker said urban consumption - dull for a few quarters - is picking up.

The seller of 'Marie Gold' and 'Bourbon' biscuits joins other domestic consumer goods makers such as Hindustan Unilever and ITC in forecasting early signs of a recovery in urban demand, aided by easing local inflation.

India's annual retail inflation slowed every month in the quarter, easing to a six-year low in June at 2.1 per cent. That helped spur a "marginal uptick in consumption across both urban and rural markets," said Varun Berry, managing director and chief executive.

 

Britannia's quarterly sales grew 9.8 per cent to ₹4,535 crore ($516.5 million). The firm had previously flagged rise in popular demand for packaged food and confectionery items such as croissants, wafers and flavoured shakes - usually more likely to be bought on impulse.

But total spends rose 10.4 per cent, led by a 15 per cent jump in raw material costs. Britannia has been hiking prices to partly offset the higher costs of raw materials such as cocoa, flour and palm oil.

Profits in the reported quarter came in at ₹521 crore, up 3 per cent on-year, but below analysts' average estimate of ₹570 crore rupees, according to data compiled by LSEG.