Britannia profit up 5.8%
Biscuits major Britannia Industries said on Monday its profit during September quarter grew 5.8% to Rs 234 crore and revenue grew 10.3% to Rs 2,456 crore as rural consumers buy more of its biscuits. It expects higher growth in the coming quarters, hoping to reap on extra cash that consumers have, due to a better monsoon and the Centre’s Seventh Pay Commission bonanza.
“Our double-digit growth for the quarter is backed by a double-digit volume growth in our base business," said Varun Berry, managing director. Biscuits contribute 80% of the company’s revenue.
Britannia reported profits of Rs 221 crore on a revenue of Rs 2,204 crore for the September quarter last year.
"We have witnessed a positive momentum in the market growth over the last few months and I believe that the impact of good monsoon and flow of 7th pay commission benefits would continue to support this trend. Our go to market strategy which entails widening our distribution network through the focus on direct reach, rural market and weak states, has helped us outpace the market, " said Berry.
The company said that the deteriorating geopolitical situation and currency fluctuations in certain geographies like the Middle East and Africa continued to impact growth. On the commodity front, the company said that the prices of key raw materials have had a high double-digit inflation, which is much beyond what they had originally estimated.
"While we have initiated price increases and accelerated our cost efficiency program, our focus is on remaining competitive in the marketplace and gain market share to build a sustainable business. We are also hopeful that certain initiatives taken by the government in terms of reduction in import duties, an imposition of stocking norms etc shall provide some respite from this steep inflation going forward," added Berry.
The company says it sees many untapped opportunities in the biscuit business and are actively working on other adjacent macro snacking business opportunities to ensure they stay ahead of the market and achieve profitable growth to take the company to the next level.
Britannia stock closed Rs 3.15 or 0.10% up at Rs 3303.20 on Monday at the BSE ahead of the results.