During the three month period, Cadbury India posted a remarkable 88.41 per cent increase in net profit to Rs 9.27 crore and a 16.54 per cent increase in net sales to Rs 116.05 crore.

Cadbury has managed to maintain its leadership due to brand launches like Perk, Picnic and now Cadbury Gold, which have resulted in pushing up sales. But in order to expand Cadbury's consumer base, analysts say that new product initiatives and increased distribution are a must. This means that the company will have to invest in new product offerings in order to avoid an erosion in profitability and sales.

Low-price offerings, analysts say, will fuel further growth for the company which is understood to be planning a string of such products on the lines of Byte. Considering that chocolates in India are impulse purchases, theprice factor plays a major role.

Cadbury India commands a market share of around 72 per cent compared to competitor Nestle's share of 25 per cent. Importantly, Cadbury Gold has managed to garner a market share of 2.6 per cent in November, without cannibalising the market share of the company's flagship brand Cadbury Dairy Milk. The total volume of the chocolate confectionery market is in the region of 23,000 tonnes valued at around Rs 800 crore. The chocolate confectionery market is estimated to have grown by about 25 per cent in calendar year 1998.

Thus during the first quarter ended March 31, 1999 operating profit for the company has also improved 48.18 per cent from Rs 12.33 crore to Rs 18.27 crore. Operating profit margins during the period also improved from 12.38 per cent to 15.74 per cent. Net profit margin improved from 4.94 per cent to 7.98 per cent. This, company sources have attributed to stringent cost control, factory efficiencies and low material costs which have all helped buoy earnings.