Bengaluru: Britannia Industries Ltd’s fourth quarter revenue and profit missed analyst estimates as the biscuit maker continued to feel the impact of demonetisation on sales.
Britannia’s profit grew 5.96% to Rs210.91 crore from a year ago in the quarter to 31 March. Revenue rose 5.59% to Rs2,349.63 crore. Analysts surveyed by Bloomberg expected the company to post a profit of Rs217.5 crore on revenue of Rs2,351.2 crore.
“It has been a good quarter in the face of a challenging market environment and sluggish demand scenario post demonetisation. We expect the situation to slowly improve over the next 3 to 6 months with the measures announced by the government in the budget and the prediction of an above average monsoon this year,” Varun Berry, managing director of Britannia, said in a statement.
On 8 November, the Indian government invalidated Rs500 and Rs1,000 banknotes in a move that triggered a countrywide cash crunch.
The company said it is actively working on filling gaps in its product portfolio, adding that a “spate of innovative products will be launched in financial year 2017-18.”
Last week, Britannia launched new premium cookie variants under its Good Day brand called Good Day Wonderfulls. Good Day is the company’s largest brand and, according to the firm, has sales of Rs2,600 crore and reaches 30% of households in India.
Growth in its international business continues to be under pressure due to a deteriorating geopolitical climate in regions like the Middle East and Africa, Britannia said in the statement. Its dairy business growth has also been subdued as it focuses on driving products with high profitability and reduces its presence in less profitable products, it added.
Raw material prices also remained high during the quarter with commodity inflation in excess of 10%. The company’s cost efficiency programme helped offset that to an extent, Britannia said. It also rationalized advertising costs and focused instead on ensuring competitiveness.
During the period, Britannia signed a joint venture with a Greek firm called Chipita S.A. to sell filled croissants – a category that the Indian firm said has become as large as biscuits in some countries. It expects the project to be commercialised by July 2018 and will continue to look for other similar opportunities.
In a separate filing with the BSE on Thursday, the company said its board approved a grant of 125,000 stock options to Berry. Each option granted will entitle him, when the options are exercised, to receive one share of the firm at a face value of Rs2.
Shares of Britannia Industries Ltd lost 0.44% to close at Rs3,517.80, while the benchmark index, Sensex gained 1.48% to close at 30,750.03 points.