After falling for two consecutive days, shares of Britannia Industries (Britannia) gained 10 percent because the cookies giant was able to sell more of its products despite raising product prices.
The Good Day manufacturer has undertaken product price hikes of 9-10 percent during the January-March quarter, said an analyst at a domestic brokerage house.
Britannia reported volume growth of 4 percent as against the CNBC-TV18 Poll estimate of 0-2 percent. According to ICICI Securities, in the March quarter, Britannia benefited from long-term commodity contracts.
On a consolidated basis, total revenue from operations came in at Rs 3,550.45 crore, up 13 percent from last year.
At 11:13 IST, the fast-moving consumer goods player's stock was trading off its day's high, up 2.1 percent at Rs 3,342.5 on BSE.
A snapshot of Britannia's earnings performance on a Year-on-Year (YoY) basis
Britannia's Q4 FY22 performance as compared with CNBC-TV18 Poll estimateThe company’s reassurance that it will continue to manage profitability by taking further product price hikes and thereby tackling cost pressure also gave confidence to investors about the company’s earnings prospect.
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“The economy was impacted by global geo-political factors which caused a further surge in inflation this quarter. We continued to take price increases judiciously and remained aggressive on the cost front. In these challenging circumstances, our operating profits for the March quarter grew by 10 percent and by 23 percent over a 24-month period. We shall take calibrated price increases and drive cost leadership to manage profitability," the company said.
ICICI Securities has upgraded its rating on shares of the company's stock to 'hold' from 'reduce'. It added that the FMCG player’s approach to price hikes, due to higher raw material prices, will be closely watched.
Meanwhile, Nomura and Macquarie have a 'neutral' call on the biscuit maker's stock. Morgan Stanley, which has an 'equal-weight' rating on the Bourbon maker, said that Britannia's earnings were marginally ahead of estimates but inflationary pressures might weigh on the margin and volume growth in the near term.
Besides, the board of directors has recommended a dividend of Rs 56.5 per share.
First Published: May 4, 2022 12:04 PM IST
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