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Britannia's margin in spotlight
Mint Mumbai
|November 14, 2024
Britannia Industries Ltd's shares are down 7% since the company released the September quarter (Q2FY25) results on Monday after market hours.
Reasons for the disappointment: Profit margin is below expectations, and the management commentary pointed to subdued demand conditions, especially in urban metros.
A sharp rise in the prices of key commodities, such as wheat, palm, and cocoa, hurt the consolidated gross margin, which fell 136 basis points (bps) year-on-year to 41.5%.
However, Ebitda margin fell at a faster rate of 290bps to 16.8% as staff costs rose as much as 45% to ₹232 crore.
In effect, Ebitda declined 10% on-year to ₹783 crore when total operating revenue growth was 5%.
The jump in staff costs is due to phantom stocks being revalued on the basis of the closing price of Britannia's shares at the end of Q1 and Q2.
This story is from the November 14, 2024 edition of Mint Mumbai.
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