Wrapup 1: India's ITC, Britannia beat profit estimates on price hikes, rural rebound

Britannia Industries

06/02/2025 14:59

By Praveen Paramasivam and Ananta Agarwal
       Feb 6 (Reuters) - Indian consumer goods major ITC
 ITC.NS  and biscuit maker Britannia Industries  BRIT.NS  beat
estimates for quarterly profit on Thursday, benefiting from
price increases and a recovery in rural demand.
    Income support schemes by several states have encouraged
people in rural India to spend more on food and other items,
helping consumer goods companies to make up for a demand
slowdown in urban areas.
    "Rural consumption is expected to build on the gradual
recovery momentum witnessed in recent months (on improving farm
incomes)," ITC said, adding the revival was one of the "key
positives" during the quarter.
    Executives at consumer goods majors are now pinning their
hopes on India's newly announced plans to cut income tax rates
to revive urban spending.
    For the third quarter ended Dec. 31, ITC reported a 1% rise
in profit to 56.38 billion rupees ($643.69 million), beating
market expectations of 51.9 billion rupees, according to data
compiled by LSEG.
    Revenue rose nearly 9% to 182.9 billion rupees, helped by
the Aashirvaad and Sunfeast parent's expansion in rural and
semi-urban areas as well as price increases implemented to make
up for inflation in edible oil and cocoa.
    Higher commodity prices squeezed margins but an 8% growth in
its mainstay cigarette business cushioned the blow.
    Britannia, which makes Jim Jam and NutriChoice biscuits,
posted a 5% increase in quarterly profit to 5.82 billion rupees,
crushing estimates of 5.21 billion rupees.
    Revenue rose 8% to 45.93 billion rupees, led by "judicious
price increases," with Britannia warning of more raises.
    "Rural demand is undoubtedly upbeat for consumer goods
makers and volume-led sales growth posted by ITC and Britannia
in challenging market conditions is impressive," Centrum analyst
Soham Samanta said.    

 (Reporting by Praveen Paramasivam in Chennai; Editing by
Mrigank Dhaniwala and Anil D'Silva)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))