In This Article:
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Revenue Growth: 6.5% growth over the last 12 months.
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Profit After Tax (PAT): 4.8% increase over the last 12 months.
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Operating Profit: Up 3%.
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Net Sales: Increased by 6.5%.
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Profit Before Tax: Up 3%.
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Profit After Tax Ratio: 13%.
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Direct Distribution Outlets: Increased from 27.9 lakh to 28.8 lakh outlets.
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Rural Distributors: Increased from 30,000 to 31,000.
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Commodity Inflation: Overall inflation for purchased commodities at 11%.
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Cost Savings: 2.5% of revenue.
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Britannia Industries Ltd (BOM:500825) reported a 6.5% growth in revenues over the past 12 months, indicating strong performance despite challenging conditions.
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The company has expanded its direct distribution network, increasing its reach from 27.9 lakh outlets to 28.8 lakh outlets, and rural distributors from 30,000 to 31,000.
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Innovative product launches, such as the Harry Potter-themed Pure Magic Choco frames and the INR5 pack of rusks, have been well-received, particularly in e-commerce and modern trade channels.
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The company's adjacency businesses, including croissants and milk shakes, are experiencing high double-digit growth, contributing to portfolio diversification.
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Britannia Industries Ltd (BOM:500825) has been recognized for its ESG efforts, achieving 100% plastic neutrality and receiving awards for its environmental impact.
Negative Points
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The company is facing an extraordinarily high inflationary environment, with commodity inflation at approximately 11%, impacting profitability.
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Market shares have remained flat due to price volatility, and the company has not taken significant price increases until recently.
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The company's profit after tax growth is only 4.8% over the past 12 months, which is lower than revenue growth, indicating margin pressures.
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There is intense competition from local players in the biscuit segment, which could impact market share and pricing strategies.
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The company has experienced volatility in staff costs due to stock appreciation rights, affecting quarterly financial performance.
Q & A Highlights
Q: How is Britannia Industries managing the high inflation, particularly in popular price points like INR5 and INR10? A: Varun Berry, Executive Vice Chairman and Managing Director, stated that the company has taken a 2% price increase in Q3, which will rise to 4.5% by the end of the year. Local players face higher inflation due to Britannia's forward buying advantage. The company is adjusting prices as inflation persists.