(Reuters) – Indian biscuit maker Britannia Industries posted a smaller-than-expected second-quarter profit on Monday, hurt by weaker demand for consumer goods, particularly in urban areas amid high inflation.
The company, which sells Jim Jam and NutriChoice biscuits, reported a nearly 10% decline in consolidated net profit to 5.31 billion rupees ($62.95 million) for the three months ended Sept.
30, missing estimates.
Analysts, on average, had expected 6.22 billion rupees, according to estimates compiled by LSEG.
Urban consumers in the world’s most populous country have been cutting back on spending due to rising prices of essentials, including food, squeezing the bottom lines of major packaged goods makers.
There was “tepid consumer demand” in most packaged consumer goods categories and “severe commodity inflation,” Managing Director Varun Berry said, echoing comments made by many of the firm’s counterparts, including Nestle India.
The company’s earnings are in line with the downbeat results posted by its peers, such as Dove soap maker Hindustan Unilever, Maggi-parent Nestle India, and tobacco major ITC, which were hurt by factors including weak urban demand.
Britannia’s revenue rose 5% to 46.68 billion rupees, but slowed from a 6% increase in the previous quarter and missed market expectations of 47.39 billion rupees, according to estimates compiled by LSEG.
The company’s total expenses rose by 8% during the quarter, hurt by higher prices of ingredients such as wheat and cocoa.
($1 = 84.3580 Indian rupees)
(Reporting by Ashna Teresa Britto in Bengaluru and Praveen Paramasivam in Chennai; Editing by Abinaya Vijayaraghavan)
