New Delhi: Packaged foods maker Britannia Industries Ltd, on Friday reported a sharp 118.25% jump in its June quarter consolidated net profit to ₹542.68 crore. Strong demand for its cookies, cakes and biscuits helped the company draw significant sales as more Indian households turned to branded packaged foods during India's turbulent lockdown.
Consolidated revenue grew 26.6% year-on-year to touch ₹3,420.67 crore for the three months ended 30 June, the company said in a filing.
Britannia's earnings come despite several headwinds faced by packaged consumer goods companies as a strict lockdown in India, that started late March and continued under some form of relaxations till May, severely disrupted supplies to the market, shuttered several small stores and wiped off out-of-home consumption.
The lockdown also forced several factories to shut temporarily and caused labour shortage for manufacturers.
While some categories were severely impacted, Indian consumers who were stuck at home turned to packaged food and in-home cooking in a big way, benefitting the likes of Britannia, Nestle and ITC.
Other FMCG companies such as HUL and Dabur India are yet to announce their first quarter earnings.
“The quarter posed an uphill task for the economy in wake of Covid-19 and caused significant disruptions due to lockdowns imposed to curtail its spread. Factories, depots, transport & vendors across the supply chain were impacted," Varun Berry, managing director, Britannia Industries Ltd. (BIL), said in a statement.
However, Berry added that as soon as the lockdown was eased, “we focussed on getting our distribution back to the pre-Covid levels and increasing our rural & hinterland reach."
During the quarter, the company launched its ‘Winkin Cow Lassi’ and rolled out a ₹5 Layer Cake pack to expand reach.
"All the adjacent businesses too delivered a healthy profitable growth," said Berry.
The company witnessed moderate inflation that helped it keep costs in control.
"On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest," Berry said.
The company was quick to deploy cost efficiencies through extraction of supply chain efficiencies, reduction in wastage and fixed costs leverage.
“We also rationalized media spends considering the constraints of inventories due to higher market demand. These measures helped us improve the shape of our business and record a massive 670 bps increase in operating profit during the quarter," he said.
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