The FMCG firm reported a 23 per cent rise in consolidated net profit to Rs 495.20 crore for the September quarter compared with a profit of Rs 405.37 crore in the same quarter a year ago. An ET Now poll had projected the company to report a net profit of Rs 498 crore.
Following the results, the stock fell 5 per cent to hit a low of Rs 3,585 on BSE. At this price, the stock was trading at 51.91 times its trailing 12-month earnings per share (EPS).
“We reduce our FY21-23 estimates by 4 per cent, factoring in low interest income after the high dividend payout. Valuations at 44 times FY22 estimates still appear reasonable, given the strong earnings outlook,” said Emkay Global.
Managing director Varun Berry said Covid-19 has brought about a situation whereby there has been tectonic shifts in economic growths and consumer behaviour across the world.
“While the government ended the lockdown, it appears that it will take a while for the situation to normalise,” he said .
The company said its consolidated revenue from operations grew 12.1 per cent to Rs 3,419.11 crore from 3,048.84 crore reported a year ago.
“With 9 per cent volume growth in the September quarter compared with 21.5 per cent in the June quarter, Britannia reaffirms what we have been highlighting regarding biscuits consumption slowing down. We believe despite the tapering off, Britannia will probably report the highest revenue growth in the sector,” Edelweiss said in a note.
Berry said the company is keeping a close watch on macro-economic factors, changes in laws, evolving consumer behaviour and is framing its medium-term strategy laying out scenarios to deal with this dynamic environment. “We are confident of performing well in these tough times with the agility in our action and passion of the team,” he added.
“In this quarter, we got our full range of products to the market, focussed on efficiency in distribution, followed continuous replenishment system of distribution, improved the health of our distributors and inched closer to normalcy in advertisement and promotions,” he said in a release.