Unexpected sales slump dims street forecast for Britannia
Britannia's Q1 FY24 performance failed to meet expectations also due to low operating profit margin, says Sharekhan by BNP Paribas report
FMCG firm Britannia's Q1 FY24 performance failed to meet Dalal Street's expectations due to unanticipated slow sales volume growth and OPM (operating profit margin).
The consolidated revenue increased by 8.4 per cent year-on-year, amounting to Rs 4,010.7 crore. The domestic standalone business showed approximately 10 per cent growth. However, sales volume in the domestic sector remained stagnant, contrasting the anticipated growth of 4-5 per cent.
Reducing input costs led to a 506-bps year-on-year enhancement in gross margins, reaching 41.9 per cent. The management indicated that demand in rural India remains subdued. Although Britannia experienced a lull in general trade, modern trade showcased robust double-digit growth. The reduction in raw material costs also sparked heightened competition, according to a report by Sharekhan by BNP Paribas.