This is turning out to be a good outing for shares of packaged foods maker Britannia Industries Limited despite the company reporting a slight drop in earnings in the April - June 2017 quarter.
The stock is up because the decline in net profit is much smaller than what was expected.
Britannia shares rose to a new all-time high of Rs 4214.50 on BSE (Rs 4211.85 on the National Stock Exchange) this morning, with investors cheering the better than expected earnings report from the company. At Rs 4168.70, the stock is now up 6.6% from its previous closing price. From a low of Rs 2772.85 it had touched on 23 December 2016, the stock has gained as much as 52%.
The volumes at the Britannia Industries counter at BSE and NSE are significantly higher than their average daily volumes. On BSE, more than 57,000 shares have changed hands so far at the Britannia counter, as compared to average daily volume of less than 6250 shares. On the National Stock Exchange, the counter has clocked a volume of around 6.58 lakh shares so far in the session.
Britannia Industries reported consolidated net profit of Rs 216 crore for the quarter ended June 2017. That was 1.4% down from the year-ago period. The company attributed the drop in profit to higher tax rate and lower margin.
The company's consolidated revenue increased 6.5% to Rs 2339.81 in the first quarter, compared to the corresponding quarter of the previous year. Volume growth (domestic) was 3%, beating expectations. Overall, the company saw a 2.5% growth in volume in the first quarter of this fiscal. Operating profit was up 3.8% (y-o-y) at Rs 328.5 crore, although margin declined by 30 basis points to 14.5% in the quarter.
The company stated that its focus on enhancing direct reach and empahsis on rural agenda helped drive growth and that it expects momentum to pick up going forward.
