Britannia Q2FY22 Results: Profit slips 23%, revenue grew 5.5% YoY amid higher inflationary trends

Fast-moving consumer goods major Britannia reported mute earnings during the second quarter of the financial year 2021-22 (Q2FY21). On a year-on-year basis, On a year-on-year basis, the company reported a growth in revenue, while its profit and margins witnessed pressure as ‘inflationary trends remained rampant.’

Britannia’s profit slipped around 23 per cent to Rs 381.8 crore in the July-September quarter as compared to Rs 495.2 crore in the same period a year ago. While its revenue grew marginally by 5.5 per cent to Rs 3607.4 crore as against Rs 3419.1 crore in the corresponding quarter of last fiscal.

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Similarly, its EBITDA declined by 17.4 per cent to Rs 558 crore in Q2FY22 as compared to Rs 675.4 crore in Q2FY21 and margins dipped by 430 basis points to 15.5 per cent from 19.8 per cent YoY. 

The management in its results commentary said, “During the quarter, the impact of the second wave of Covid-19 started receding, and the economic activity started picking up. However, inflationary trends remained rampant around the globe, across sectors.”

It added the global economy continued to witness supply-led constraints across various input materials fuelling inflation. As a result, we are witnessing unprecedented inflation in market prices in the various segments leading to overall inflation in the quarter of around 14 per cent. 

The results came lower-than D-street’s expectations as the majority of the brokerage houses and analysts had predicted the revenue to be posted between 7-11 per cent. Moreover, the EBITDA margins were also expected to improve, which was also below expectations.

While on the EBITDA front, the company reported almost in-line numbers, wherein the operating profit slipped by over 17 per cent during the quarter.