Biscuit and bread maker Britannia Industries Ltd has posted over two-fold increase in consolidated profit in the fiscal first quarter even while the FMCG industry has been facing the headwinds of coronavirus. “The quarter posed an uphill task for the economy in wake of COVID-19 and caused significant disruptions due to lockdowns imposed to curtail its spread. Factories, depots, transport and vendors across the supply chain were impacted,” Varun Berry, Managing Director, Britannia Industries, said, acknowledging that the quarter wasn’t lenient for the company. However, Britannia reported profits at Rs 542.68 crore for the quarter ended June 30, 2020, on the account of higher income. The homegrown FMCG company had earlier posted a profit of Rs 248.64 crore in the same quarter in the previous financial year.
While prices of key raw ingredients witnessed a surge, Britannia reduced its spends as a measure to remain cost-effective. “On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon and harvest,” Varun Berry said, adding that Britannia rationalised media spends considering the constraints of inventories due to higher market demand.
Key takeaways from Q1 results
- Britannia’s total income stood at Rs 3,514 crore, up by 26.97%, as against Rs 2,767.8 crore in the quarter year ago.
- The biscuit maker’s consolidated revenue grew by 26% for the quarter at Rs 3,384 crore.
- Britannia reported a consolidated net profit increase by 117% for the quarter ending June at Rs 546 crore.
- Shares of Britannia were trading 1.43% lower at Rs 3,798.55 apiece on BSE after the results announcement.
Meanwhile, FMCG major Britannia has been trying to push its biscuits category with an eye on the local markets. The company has also come up with a strategy to woo consumers from Hindi Heartland and ‘Many Indias’, a report said recently. “Large brands like Good Day, Milk Bikis and Marie Gold have employed localized strategies to meet the unique needs of different markets and fight local players. A focused and localized strategy has been adopted for the Hindi Heartland states as well,” brokerage and research firm Motilal Oswal said in the report, citing management discussions.