The ongoing rural slowdown continues to affect the sales of major FMCG companies and the bread and biscuit maker Britannia is no exception. In the Q1 results declared on Friday, the company said that growth in Hindi belt was muted for the company due to rural distress. Major states driving the slowdown for Brittania are Himachal Pradesh, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Madhya Pradesh and Chhattisgarh. However, the company said that it has gained market shares in all the states. Britannia’s profitability has also taken a considerable hit due to growth slowdown and from consolidated PAT of Rs 294 crore in Q4FY19, the same has been reduced to Rs 267 crore in Q1FY20. 

Britannia’s spirits are not dampened by the ongoing slowdown and the company has plans to foray further into new categories as well as other countries. “National roll-out imminent in the next year, and then an increasing presence within extruded snacks,” Britannia announced in a statement. Further, Britannia has plans to ramp up it salted snacks category “with 75% of capacity utilisation of first plan in South in the 4th month of operations, followed by expansion to rest of India in 12 months,” the company added. 

The company is mulling an expansion into another Southeast Asian country, however, Britannia has not divulged the details of the particulars. Brittania had recently commenced its operations in Nepal and the company has exhibited double-digit growth, Britannia said. 

The slowdown is emanating from North and West regions of the country which includes Haryana, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh, Maharashtra and Assam, Nielsen said recently in its FMCG growth report. 

Key takeaways from Q1 results

  • Britannia has reported consolidated net sales of Rs 2,677 crore.
  • Profits after tax witness negative 3% growth compared to previous year and stood at Rs 251 crore. 
  • Various factors led to decline in profitability including inordinate increase in milk price.