Why has Britannia stock been so weak recently?

Britannia Industries fell 3% on Friday and that was largely on the back of pressure created by rising input cost pressures. This has become a major overhang for most FMCG companies, and Britannia is no exception. Key inputs like food related items have gone up sharply in the last few months leading to heavy input cost inflation. The stock of Britannia is now trading close to its 52-week low price and it is just less than Rs.50 shy of its low price.

In last 6 months, Britannia stock is down nearly 12% against a mere 0.37% decline for the Nifty 50 index. Britannia is the market leader in the premium biscuits segment and also in the area of bakery products. However, input inflation has put tremendous pressure on Britannia. Consider these numbers. Its input costs were 4% higher on a sequential basis and 20% higher on a yoy basis. In addition, rural markets also slowed down in recent months.