Britannia Industries share price dips 3%; here's what's dragging stock

Britannia Industries shares slipped 3 per cent in trade and registered an intraday low of Rs 4,748.15 per share

Britannia shares declined 2.9 per cent on Thursday and registered an intraday low of Rs 4,748.15 per share. The selling in the stock came after Food Safety and Standards Authority of India (FSSAI) issued a notice over the use of a preservative in one batch and prohibited its sale.

 

Around 10:33 AM, Britannia's share price was down 2.2 per cent to Rs 4785.9 per share on BSE. In comparison, the BSE Sensex was down 0.66 per cent at 77,069.53. The market capitalisation of the company stood at Rs 1,15,518.03 crore. The 52-week high of the company was at Rs 6,473.1 per share and 52-week low of the company was at Rs 4,628.3 per share.

 

 

An exchange filing released on Tuesday, after market hours, informed investors that the company received a notice from FSSAI on November 12, 2024, by one of the company’s officials with respect to an analysis report of referral laboratory which showed  one of the batches of the company’s product along with notice for prohibition of sale thereof. 

 

"The notice has been issued relating to compliance of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 regarding use of one of the preservatives within prescribed limits in one of the batches of the Company’s product," the filing read. 

 

Britannia Q2 results 

Britannia posted a fall of 9.6 per cent in profit after tax (PAT) for Q2FY25 to Rs 531 crore as compared to Rs 588 crore a year earlier. 

 

The biscuit maker's consolidated revenue from operations at Rs 4,667.57 crore in Q2 as compared to Rs 4,432.88 crore a year ago, up 5.3 per cent. 

 

The Earnings before interest, tax, amortisation, and depreciation (Ebitda) for the quarter under review stood at Rs 783 crore, down 10 per cent, as compared to Rs 872 crore. Similarly, Ebitda margins for the quarter stood at 16.8 per cent as compared to 19.7 per cent a year ago. 

 

Britannia Industries' management said it remains focused on its strategy to drive market share while sustaining profits.

 

Discussing the outlook, Varun Berry, vice chairman and managing director of Britannia Industries, told analysts during a conference call after the results that the company is closely monitoring the commodity situation and taking steps on a day-to-day basis.

 

“We are very vigilant about competitive pricing actions because we understand that as market leaders, we need to take the lead. However, we do not want to be uncompetitive, and that is something we are keeping an eye on,” he said.

 

In the past one year, Britannia shares have gained 4.1 per cent against Sensex's rise of 18 per cent.