MUMBAI: Shares of Britannia Industries surged 7.4% on Wednesday after the company announced a 26% year-on-year rise in its March quarter consolidated net profit to ₹374.75.
At 1150 am, the Britannia stock traded at ₹3,651.90 apiece, up 5.8% from its previous close, extending its five-day gains. The stock has risen 15% in six straight sessions from its closing low of ₹3,162.75, while the benchmark index, Sensex has gained 1.5% to 34321.27.
Net profit was aided by a significant drop in tax expenses, with outgo declining 45.4% to ₹84.92 crore in January-March.
Analysts at Motilal Oswal, in a note to clients, said, "During the lockdown period, Britannia continued to garner market share through its focus on distribution, diligence in marketplace and brand building through focused product campaigns and revenue growth of over 20% in April and May."
"Management had indicated moderate inflation in the prices of key raw materials for the bakery business and commodity prices at global level witnessed moderation due to low demand on account of lockdown in most parts across the world".
The brokerage has maintained its neutral rating on the stock.
Commenting on the performance, Varun Berry, managing director, said the drive on cost efficiencies, reduction in wastages and ability to leverage fixed costs helped improve the shape of business and record a 40 basis points increase in operating profit during the quarter despite the disruption from the covid-19 pandemic.
The company reported a 21% rise in net profit to ₹1,402.63 crore and a 4.3% rise in net sales to ₹11,443.99 crore for fiscal 2020.
Britannia Industries is one of India's leading food companies, with a product portfolio comprising biscuits, bread, cakes, rusk, and dairy products including cheese, beverages, milk and yoghurt.