Trading sales came down substantially as purchase of finished goods plunged from Rs 67.3 crore to Rs 21 crore. Consumption of raw material grew by 21.7 per cent to Rs 144.5 crore because of rising prices of vanaspati. Fluctuations in input prices can have a significant impact on cost and margins. The company fears this may affect volumes adversely. The company earned an operating profit of Rs 44 crore and a net profit of Rs 25 crore.
The mass market segment which accounts for 60 per cent of total biscuit segment has always been a growth driver for biscuit manufacturers since this segment caters to the low-price /low-income categories. The company has Tiger brand in this segment. In this segment, value growth is lower than volume growth. Tiger brand operates in a competitive market where price is an important factor. Consequently, the pricing strategy is largely driven by the competitive dynamics of the segment.
BIL is now formulating a new strategy to attract children by floating new biscuits. The company is in the process of rolling out a new variant of its popular biscuit brand Tiger Mast Cream across the country. This launch comes subsequent to the successful soft launch of new products recently. The product comes in the format of a sandwich and is available in various flavours. Britannia says more such innovative product roll-outs will be explored in future.
The company is now in talks with speciality coffee outlets and petrol pumps to place the products at strategic sites. BIL is taking up festival-specific initiatives to trigger mobility for brands like Pure Magic and GoodDay Cakes. The company plans to launch a range of assortment packs. The initiative is to improve institutional sales along with enhancing the display appeal for brands.
The company is also extending its Little Hearts range to penetrate the youth segment more effectively. The consumer response for GoodDay has been encouraging. The price of GoodDay has been taken up only in the south Indian markets to bring in parity. This brand has shown a healthy growth. The two new variants of Tiger -- Chai Biskoot and Mast Cream -- have also met with enthusiastic response. Such initiatives will enable the company to maintain its growth momentum.
The company bought back shares in September and December 2002 and consequently the equity capital has been slashed from Rs 26.9 crore to Rs 25.9 crore.