Britannia shares fall after CEO projects two more quarters of pain – CNBC TV18

Shares of Britannia Industries saw a nearly 2% decline from the day’s high of ₹4,910.50 and were trading 1.2% lower at ₹4,831.40 at 1:50 PM on the BSE, reflecting ongoing concerns about inflationary pressures and uneven demand trends in the FMCG sector.

CEO Rajneet Kohli, speaking at the CII FMCG Summit, cautioned about challenging quarters ahead. “Inflation continues to weigh on the industry, and while we’re seeing improved rural demand, urban growth has slowed, and this trend is likely to persist for another quarter or two,” he said.

Britannia, is grappling with heightened inflation, forcing it to increase prices across key categories like biscuits, rusks, and cakes. Further hikes are planned for the January-March quarter to manage rising input costs. Kohli noted that the company is focused on enhancing cost efficiency to mitigate the impact on consumers.

The stock has lost nearly 27% from its October 2024 peak of ₹6,470, reflecting ongoing investor concerns. It has also slipped below all key daily moving averages, including the 20-day and 200-day metrics, indicating bearish momentum.

Also read: FMCG sector revival likely by FY26, says Britannia CEO

Britannia’s Q2 FY25 earnings add to the subdued sentiment. The company reported 5% year-on-year revenue growth, falling short of estimates, with volumes increasing by 8%. However, the EBITDA margin contracted sharply by 290 basis points to 16.8%, impacted by rising costs, including a 45% increase in employee expenses tied to phantom stock revaluation.

Commodity pressures also weighed heavily on margins. Palm oil prices surged 45% quarter-on-quarter, driven by a 40% import duty and supply challenges in major producing countries.

Britannia had earlier guided for a 4-5% price hike in the second half of FY25 while maintaining optimism about improving volumes in the coming quarters.

Britannia reported an 8% year-on-year volume growth in Q2 FY25, maintaining a similar pace to the first quarter, though slightly below the estimated 9%.

Still, its operating margin remains under pressure, posing a key challenge to meeting investor expectations.