Britannia Industries share price zooms 3% post Q1 results; here's what brokerages say

Shares of Britannia Industries rose 3.5 per cent to hit an intraday high of Rs 3,540 on BSE after the company reported a 29 per cent decline in consolidated net profit at Rs 387 crore for the quarter ended June 30. The company had posted a consolidated net profit of Rs 543 crore for the April-June period of the previous fiscal.

Total income during the first quarter stood at Rs 3,464 crore, compared to Rs 3,514 crore in the same period of last fiscal.

The stock opened 0.36 per cent higher at Rs 3432.50 against the previous close of Rs 3420.05. Market cap of the firm rose to Rs 83,748.70 crore on BSE. The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages.

“Second wave of Covid-19 struck the country hard followed by lockdowns imposed by various State Governments. We witnessed evolving nature of the pandemic as well as consumer sentiment & behaviour. In these uncertain times, we delivered a healthy Consolidated 24-month Sales growth of 25% and Net Profit growth of 55%. This performance is a testament to our resilience as a company and more importantly as a team," said Mr. Varun Berry, Managing Director, Britannia Industries.

"On the cost front, we continued to witness an increase in the prices of palm oil and crude. In light of hardship to the consumers owing to the pandemic, we were cautious on pricing but aggressive on cost efficiencies, which helped us improve our operating profit from 14.9% in Q4’20-21 to 15.1% in Q1’21-22," he noted.

"We shall take calibrated price increases as things normalize and will continue to create and sustain an ecosystem of financial & operating efficiencies through rigorous process improvements which would act as a strong pillar for sustainable growth," he added.

CLSA noted that the margin pressure was along expected lines, while better topline aided overall delivery. The brokerage house has an 'Underperform' rating on the stock with a target price of Rs 3,625 per share.

However, Motilal Oswal believes that the price of palm oil and crude continued to increase and the company will take a calibrated price increase as the situation normalises. The brokerage firm has a 'Buy' rating on the stock.