Britannia rises as upbeat demand outlook, profit growth cheer investors

Britannia Industries' shares surged by up to 4.7 percent on Friday after the company reported a higher quarterly profit and signaled stronger demand. The biscuits maker's robust performance has prompted analysts to reaffirm its growth outlook, despite challenges such as volatile commodity prices and supply-chain disruptions. Britannia Industries CEO and Managing Director Rakshit Hargave stated on an earnings call that demand is holding up and they have exited the quarter on a very positive note.

The company forecast an improving domestic demand environment to support growth, while acknowledging geopolitical tensions in West Asia and volatile crude oil prices as potential risks to input costs. In response to these challenges, Britannia accelerated cost-efficiency measures, including packaging optimization, wastage reduction, procurement efficiencies, and increased use of alternate fuels and renewable energy.

These measures helped cushion the impact of rising industrial fuel and laminate costs during the quarter. Total expenses rose 7.3 percent to ₹42.62 billion ($447.34 million) for the quarter. Britannia reported a 13.4 percent rise in quarterly consolidated net profit to ₹5.91 billion, with revenue from operations increasing 8.2 percent to ₹50 billion.

The positive results and outlook have lifted investor sentiment, pushing shares to a three-month high of ₹5,660 on Friday. Analysts have highlighted improving domestic demand and market share gains as key near-term growth drivers. Macquarie analysts noted that easing supply-chain constraints could support margins, maintaining their "hold" rating with a price target of ₹5,851.

Nomura maintained a "buy" rating and a price target of ₹6,500, citing low-single-digit price hikes that supported volume growth broadly in line with expectations.