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Informist, Thursday, Feb. 6, 2025

 

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--Britannia: To continue to focus on driving mkt share, sustain profitability
--Britannia: Will implement targeted price increases for specific brands
--Britannia: Co will closely watch commodity price inflation
--Britannia: Wheat, palm oil, cocoa costs continue to rise
--Britannia: Oct-Dec volume, value grew 6?ch on year
--Britannia: Saw strong performance despite muted demand, higher competition
--Britannia Apr-Dec consol revenue INR 135.10 bln vs INR 127 bln year ago
--Britannia Apr-Dec consol net profit INR 16.19 bln vs INR 16.02 bln yr ago
--Britannia Oct-Dec consol revenue INR 45.93 bln vs INR 42.56 bln year ago
--Britannia Oct-Dec consol net profit INR 5.82 bln vs INR 5.56 bln yr ago
--Analysts saw Britannia Oct-Dec consol net profit INR 5.17 bln
--Britannia Oct-Dec consol net profit INR 5.82 bln

 

By Sunil Raghu

 

AHMEDABAD – Falling employee benefits expenses, inventory gain and lower taxes helped Britannia Industries Ltd offset rising raw material prices and surpass the Street's projections for Oct-Dec, both on its net profit and revenue fronts. Though the FMCG major continued to face tepid consumer demand and increased competition, it was able to offset some of the higher costs by raising prices of the goods it sells.

 

Britannia reported a 4.6% on-year rise in net profit to INR 5.8 billion against the Street's projections of INR 5.2 billion. The revenue, at INR 45.9 billion, also was higher than the Street's projections of INR 44.9 billion, The revenue rose 7.9% on year from INR 42.6 billion. The company's sales volume increased 6% on year during the period under review. Britannia's net profit in the year-ago quarter was INR 5.2 billion and that in Jul-Sept was INR 5.3 billion. Revenue in the year-ago period was INR 42.6 billion and that in Jul-Sept was INR 46.7 billion. 

 

 

 

In Oct-Dec, the net profit of Britannia generally sees an on-quarter fall. Since 2015, Oct-Dec was only the third time that the company has seen an on-quarter rise in its net profit.

 

The company maintained that its performance was strong, with both value and volume growing about 6%, despite the ongoing subdued demand across fast moving consumer goods categories and increased competitive pressures. "The inflation on key input materials of Wheat, Palm Oil, Cocoa etc. remains on an upward trajectory, which we mitigated through judicious price increases, focused brand investments and fixed cost leverage, helping us sustain operating margins while maintaining competitiveness," said Varun Berry, vice chairman and managing director of Britannia, in a statement issued by the company. 

 

In the statement, Britannia said that it continued expanding its distribution network, reaching directly to about 2.9 million outlets nationwide. The company's adjacent business as dairy drinks, croissant and wafers witnessed a double digit growth during the December quarter.

 

The largest cost overhead for the company--raw materials--increased 23.5% on year to INR 26.3 billion, and employee benefit expenses fell 46.7% on year to INR 1.1 billion. The wage bill fell as the company had shut down one of its oldest plants in the country and offered some of its employees a one-time voluntary retirement scheme.

 

Finance costs were up by 43.3% on year to INR 445.6 million, and depreciation and amortisation costs increased by 5.5% on year to INR 823.8 million. Effectively, total costs rose by 9.3% to INR 38.8 billion. The company's tax outgo during Oct-Dec was INR 2 billion, down 3.2% from a year ago.

 

The company said that it would closely monitor the commodity price inflation and implement targeted price increases for specific brands and categories, as needed. "Our focus shall continue to be on driving marketshare while sustaining profitability," the company said in its statement.

 

For Apr-Dec period, Britannia reported a net profit of INR 16.2 billion, up 1.1% from INR 16 billion a year ago. The company's consolidated revenue for the nine-month period was at INR 135.10 billion, compared to INR 127 billion a year ago, up 6.4%. On Thursday, shares of Britannia closed higher by 0.5% at INR 4,956.05 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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