BENGALURU (Reuters) – India’s Britannia Industries reported second-quarter revenue that fell short of analysts’ expectations on Wednesday, as the biscuit maker cut prices of some of its key products to stave off competition.
Britannia, which also sells cakes and breads, said its revenue from operations was up 1.2% at 44.33 billion rupees ($532.6 million), but fell short of analysts’ estimates of 45.43 billion rupees, as per LSEG data.
“As the commodity started to soften this quarter, we have seen pricing activity by competition in certain categories,” said Managing Director Varun Berry, adding that Britannia cut prices in some of its key brands to increase its market share.
Analysts have said a recovery in rural demand for packaged foods remained below expectations in the quarter due to high-food prices, but expects a pick-up in demand in the current quarter due to a delayed festive season.
“Our potential in rural continues to remain high and hence, expansion in rural distribution continued despite a reported rural slowdown,” Berry added.
Lower costs in the quarter ended September, however, helped Britannia post a 19.1% rise in consolidated net profit of 5.88 billion rupees, topping analysts’ estimate of 5.46 billion rupees.
Expenses fell 2.3% to 3.69 billion rupees.
Britannia also added that it was watchful of the impact of volatile global commodity prices on its businesses amid ongoing strife in the Middle East and Russia.
Its shares have gained nearly 2.1% in the year so far, as compared with a near 16% rise in the NIFTY FMCG index.
($1 = 83.2370 Indian rupees)
(Reporting by Manvi Pant and Indranil Sarkar in Bengaluru; Editing by Shailesh Kuber)