InvestorQ : What is your take on the fall in profits reported by Britannia Industries in Q2?
sara Kunju made post

What is your take on the fall in profits reported by Britannia Industries in Q2?

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Mary Joseph answered.
4 weeks ago
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For Q2 ended Sep-21, FMCG major Britannia Industries reported 5.5% growth in sales at Rs.3,607 crore. One trend evident in the sales figure in the Sep-21 quarter was the impact of COVID 2.0 receding as sales grew 24% over the pre-COVID 2019 levels. Britannia focused on direct distribution and rural footprint. It Britannia launched Milk Bikis in TN and expanded presence of Potazos snack. In Q2, Britannia launched Treat Stix and Marble Cake.

Let me turn to your query on the fall in profits. Net profits for the Sep-21 quarter were down -22.9% at Rs.384.22 crore compared to Sep-20 quarter. Operating margins fell 429 bps to 14.09% due to a 54% spike in palm oil, 35% higher cost of industrial fuels and 30% increase in packaging costs. Overall cost inflation spiked 14% in Q2 and due to stiff competition, price hikes had to be measured. NPM at 10.65% was lower than 14.57% yoy.

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