India's Britannia misses Q2 profit view as urban demand slows (updated)

Britannia Industries

11/11/2024 13:19

(Adds revenue, background in paragraphs 4-8)
       Nov 11 (Reuters) - Indian biscuit maker Britannia
Industries  BRIT.NS  posted a smaller-than-expected
second-quarter profit on Monday, hurt by weaker demand for
consumer goods, particularly in urban areas amid high inflation.
    The company, which sells Jim Jam and NutriChoice biscuits,
reported a nearly 10% decline in consolidated net profit to 5.31
billion rupees ($62.95 million) for the three months ended Sept.
30, missing estimates.
    Analysts, on average, had expected 6.22 billion rupees,
according to estimates compiled by LSEG.
    Urban consumers in the world's most populous country have
been cutting back on spending due to rising prices of
essentials, including food, squeezing the bottom lines of major
packaged goods makers.
        There was "tepid consumer demand" in most packaged
consumer goods categories and "severe commodity inflation,"
Managing Director Varun Berry said, echoing comments made by
many of the firm's counterparts, including Nestle India
 NEST.NS .
        The company's earnings are in line with the downbeat
results posted by its peers, such as Dove soap maker Hindustan
Unilever  HLL.NS , Maggi-parent Nestle India, and tobacco major
ITC  ITC.NS , which were hurt by factors including weak urban
demand.
        Britannia's revenue rose 5% to 46.68 billion rupees, but
slowed from a 6% increase in the previous quarter and missed
market expectations of 47.39 billion rupees, according to
estimates compiled by LSEG.
        The company's total expenses rose by 8% during the
quarter, hurt by higher prices of ingredients such as wheat and
cocoa.
        
  
($1 = 84.3580 Indian rupees)

 (Reporting by Ashna Teresa Britto in Bengaluru and Praveen
Paramasivam in Chennai; Editing by Abinaya Vijayaraghavan)
 ((AshnaTeresa.Britto@thomsonreuters.com;))