Britannia's margin in spotlight

Britannia Industries Ltd's shares are down 7% since the company released the September quarter (Q2FY25) results on Monday after market hours.

- Pallavi Pengonda

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.