Britannia shares surge 5% after strong operating beat in Q2 results, brokerages upbeat

Shares of Britannia Industries Ltd. are likely to react on Thursday, November 6, in response to its quarterly results, which were reported during the mid-week holiday on Wednesday.The company’s revenue of ₹4,841 crore was largely in-line with the CNBC-TV18 poll of ₹4,878 crore, while its net profit of ₹655 crore was higher than then estimate of ₹585 crore.

However, the operating performance of the company was a convincing beat in comparison to expectations. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of ₹955 crore was over ₹100 crore higher than the CNBC-TV18 poll estimate of ₹846 crore, while margins of 19.7% were also well above the poll estimate of 17.3%.

On a year-on-year basis, the company’s EBITDA grew by 21.8%, while margins expanded nearly 300 basis points.
Gross margins for the quarter also saw a 20 basis points expansion to 41.7% from 41.5% last year.The management attributed the growth to Rusk, Wafers and Croissants, which continued to delivery double-digit growth and that the aim is to drive the business through healthy volume-led growth.

In another announcement, Britannia announced the appointment of Rakshit Hargave as its CEO, after Birla Opus announced the resignation of Hargave during the mid-week holiday on Wednesday.

40 analysts have coverage on Britannia, out of which 25 have a “buy” rating, 12 say “hold”, while three have a “sell” recommendation.

Shares of Britannia Industries have opened with gains of 5% on Thursday at ₹6,186, closing in on its 52-week high of ₹6,336.