Britannia Industries’ shares fell sharply on November 12 following the release of its second-quarter earnings report, which revealed results below market expectations. The company, known for products like JimJam biscuits, reported a consolidated net profit of Rs 531.5 crore for the quarter ending in September—marking a 9.4 percent decline from the Rs 586.5 crore recorded in the same quarter last year. Revenue from operations saw a moderate increase of 5 percent, coming in at Rs 4,667.6 crore compared to Rs 4,432.88 crore in the previous year’s equivalent period.
High inflation continues to impact demand, especially in urban markets, pressuring consumer spending. Rising ingredient costs, particularly for wheat and cocoa, contributed to an 8 percent increase in total expenses, further challenging Britannia’s profitability this quarter.
As of 9:25 a.m. on the National Stock Exchange (NSE), Britannia’s stock price dropped 2.4 percent to Rs 5,304.25 per share.
Brokerage firms were largely cautious in their outlook for Britannia. Goldman Sachs expressed disappointment with the Q2 performance, citing lower-than-expected revenue growth despite high single-digit volume gains. The firm noted that EBITDA margins dropped significantly and anticipated further pressure in the latter half of FY25 due to rising input costs. Maintaining a neutral stance, Goldman Sachs set a target price of Rs 5,350 per share.
Morgan Stanley echoed this sentiment, highlighting risks to Britannia’s financial guidance given the impact of inflation on both demand and profit margins. The brokerage reiterated its ‘equal-weight’ rating, assigning a target price of Rs 5,424 and indicating that the results missed expectations across key metrics.
Similarly, Japanese brokerage Nomura held its neutral position, noting that Britannia had another quarter of below-expected results, while Investec maintained its ‘hold’ rating, citing continued margin pressures.
Over the past 12 months, Britannia’s shares have gained around 15 percent, a modest rise compared to the Nifty 50 benchmark’s 25 percent gain over the same period, reflecting a degree of underperformance amid the ongoing market
challenges.