New Delhi: Packaged food company Britannia Industries Ltd on Friday reported a 47% jump in quarterly net profit 557.60 crore, helped by softening raw material prices and increased cost-efficiency.
Consolidated sales grew by 11% during the quarter ended March 31, 2023 3,892 crores, Vs. 3,508.35 crore in the year-ago period. Gross margin grew 688bps year-on-year to 44.9%. EBITDA increased by 45.7% YoY.
Revenue growth was driven by “significant distribution gains” during the quarter, the company said. “We continued to accelerate our rural journey with a focus on expanding reach, partnering with 28,000 rural distributors, and maintaining our diligent market practices… We supported our brand and innovation digital And with investments expected in the mass media space,” Varun Berry, Vice Chairman and Managing Director, said.
Moderation in material prices in the second half of the financial year as well as increase in cost efficiencies helped the company report an improvement in operating margin for the quarter.
“On the cost and profitability front, input prices softened on the back of improvement in palm oil and packaging materials, while flour continued to rally. Moderation in commodity inflation coupled with our intensive cost efficiency program has resulted in healthy operating margins for the quarter. We are cautious about competitive actions in the market and are closely monitoring the commodity situation in the country, especially in the case of wheat and sugar.
“We will take appropriate pricing action to remain competitive and increase market share,” he added.
Berry said the biscuit maker may consider cutting prices to increase volumes going forward. Price cuts have already started on some brands and pack sizes.
“There was some moderation in actual prices in the second half of this year. We have also increased cost efficiency and we are also evaluating whether there is a need for some price correction. So, the outlook is that we will be competitive Will remain relevant on pricing actions. If there is a need for price reduction, we will take the right decision. There are some brands and some packs that have already started price reduction or promotion and we will continue to work,” Berry said. And see what needs to be done to move forward.
Meanwhile, the company’s croissant business has crossed 100 crore in sales after the national launch. The company commercialized two biscuit greenfield units in Uttar Pradesh and Tamil Nadu along with brownfield expansion in Orissa during the quarter. The move is in line with the strategy to manufacture in-house, exclusive range of products and enhance productivity. The company also commercialized three new lines for rusks.
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