Biscuit and bread maker Britannia is an outlier with its sales and PAT estimated to be in double digit during the lockdown even while FMCG companies in general remained downbeat due to coronavirus.
Biscuit and bread maker Britannia is an outlier with its sales and PAT estimated to be in double digit during the lockdown even while FMCG companies in general remained downbeat due to coronavirus. While staples in large were less affected as people remained confined to their homes, Britannia has emerged as the biggest beneficiary and its sales and PAT growth estimates are around 21% and 51% respectively, according to a report by Emkay Global. Maggi-maker Nestle is the closest competition to Britannia with its sales and PAT growth estimated at 7% and 20% respectively. For other major FMCG companies, the coronavirus period was not so lenient and it is expected that they will witness an average sales and PAT decline of 20% and 23% respectively.
“Moderation in wheat and SMP prices, along with lower crude prices, to improve gross margins sequentially. Cost savings and lower ad spends should help sustain operating margins,” Emkay Global said, commenting on Britannia’s performance amid the pandemic. The company reported strong sales growth, led by volume growth in high-teens. Further, stronger product mix and lower promotions may drive more upside for Britannia.
Meanwhile, the growth trend for retail companies was not promising unless they dealt in essential goods. “Companies having higher salience of essential products being less affected whereas others being severely affected due to the loss of sales during the lockdown period. Staples are the least affected, with a sales decline of 4%,” the report said. However, paints, alcobev and retail are likely to report sales declines of around 40%, 55% and 65% respectively. Restrictions on the sales of non-essentials goods also led to lower sales in April while some players benefited from higher usage of hygiene and healthcare products.