Reasons for the disappointment: Profit margin is below expectations, and the management commentary pointed to subdued demand conditions, especially in urban metros.
A sharp rise in the prices of key commodities, such as wheat, palm, and cocoa, hurt the consolidated gross margin, which fell 136 basis points (bps) year-on-year to 41.5%.
However, Ebitda margin fell at a faster rate of 290bps to 16.8% as staff costs rose as much as 45% to ₹232 crore.
In effect, Ebitda declined 10% on-year to ₹783 crore when total operating revenue growth was 5%.
The jump in staff costs is due to phantom stocks being revalued on the basis of the closing price of Britannia's shares at the end of Q1 and Q2.
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