PremiumPackaged foods company Britannia Industries Ltd. (BIL), on Friday reported a 18.4% dip in December quarter profit at ₹370 crore amid increasing input costs that prompted the company to accelerate its cost saving programs
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NEW DELHI : Packaged foods company Britannia Industries Ltd. (BIL), on Friday reported a 18.4% dip in December quarter profit at ₹370 crore amid increasing input costs that prompted the company to accelerate its cost saving programs. In the year ago period—the company had reported a profit Rs452.64 crore.
Total revenue from operations at the biscuit and butter maker grew 13% to ₹3,574.98 crore against the ₹3,165.61 crore reported a year ago.
The company flagged a “significant" slowdown in rural markets for makers of fast-moving consumer goods.
“We delivered a high single digit volume growth significantly ahead of the market and a resilient double-digit top-line growth of 14%, driven by superlative performance across divisions and channels. While the rural markets across FMCG witnessed significant slowdown, we were able to maintain a significant competitive advantage through our focus to enhance rural footprint and our diligent market practices, which is reflected in the robust top-line growth and consistent gain in market share," said Varun Berry, Managing Director, Britannia Industries Ltd.
Berry said the company continued to witness increased commodity prices with an inflation of 4% quarter-on-quarter and 20% over last year.
Cost of material consumed during the quarter grew 22% year-on-year for the maker of Good Day and Marie Gold biscuits. Total expenses during the quarter were up 18.5% to touch ₹3,123.02 crore year-on-year. This is despite the company reporting a marginal dip in employee benefit expenses.
As market leaders, we actioned price increases ahead of competition, said Berry.
“However, the upward trajectory in prices of commodities and fuel impacted profitability, which led us to action further price increases and accelerate cost efficiency programs," he said.
Companies across the board have been facing inflationary headwinds with prices of everything from raw materials to packaging material and transportation moving up. Mint had earlier reported that rival Parle Products plans to continue price hikes till the end of the current financial year.
During the quarter the company relaunched its power brand “Good Day" backed by TV, print and outdoor media, and visibility drives, towards the end of the quarter.
“We are confident that our resilient brands and strategic growth initiatives will hold us on a path of sustainable and profitable share gain in the future as well," said Berry.
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