Shares of Britannia Industries Ltd. are in focus today, after the bakery major reporting a 9.4% year-on-year decline in net profit for the second quarter of FY25. The company posted a net profit of ₹531.6 crore for the quarter ending September 30, 2024, down from ₹586.5 crore in the same period last year.
Revenue from operations, however, saw a 5.3% increase to ₹4,667.6 crore, compared to ₹4,433 crore in the previous fiscal.
The Q2 earnings fell below expectations from international brokerages. Goldman Sachs noted that while Britannia experienced high single-digit volume growth, the revenue growth was lower than anticipated, and the EBITDA margin faced significant pressure, likely to continue due to rising input costs in H2FY25. The brokerage maintained a ‘neutral’ rating with a target price of ₹5,350 per share.
As of 9:21 am the shares were trading 2.87% lower at ₹5,278.70 on NSE.
Similarly, Morgan Stanley retained an ‘equal-weight’ rating, citing downside risks due to inflationary pressures impacting demand and profitability. The brokerage has a target price of ₹5,424 per share. Japanese brokerage Nomura and Investec also issued cautious outlooks, with Nomura maintaining a ‘neutral’ stance and Investec a ‘hold’ rating, both pointing to Britannia’s ongoing margin challenges.
Over the past 12 months, Britannia shares have underperformed, gaining around 15%, compared to the Nifty 50’s 25% rise in the same period.
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