Mumbai: Bakery and biscuit maker Britannia posted a 19% increase in its net profit to Rs 37.85 crore for the three months ended 30 September from the year earlier thanks to robust sales this quarter. This despite a one-time expenditure of Rs 15 crore towards the closure of a factory in Mumbai.
Excluding this expense, profits went up 50% during the quarter.
Vinita Bali, MD, Britannia Industries. File photo.
Revenues meanwhile went up 18.2% to Rs 1,294 crore from the previous year on the back of strong volume growth as well as significant price increases.
However, considering the volatility in commodity costs, Britannia’s raw material costs shot up to Rs 720 crore this quarter from Rs 658 crore the previous year. “We’ve had some intense cost management across the value chain,” said Vinita Bali, managing director referring to high commodity prices. “Wheat flour and sugar are stable but milk and milk based products have gone up and it’s quite challenging.”
For Britannia, input costs account for about 70% of its revenues, considering that, price increases have become an inevitable route for growth. “This quarter about 10% of our growth has come from volumes, while the rest is a result of mix and price increase,” Bali added.
The company has launched two new products under the NutriChoice brand-NutriChoice Multigrain Thins and NutriChoice Multigrain Roasty. The move is a part of the Wadia-owned company’s strategy to push health-based products to give it an edge over competition as global players with deep pockets make a play for the same market. “And the move it seems is paying off. Broadly speaking the results look good,” said Amnish Aggarwal, an analyst at Motilal Oswal Financial Services.
The results were announced after market hours. Shares of Britannia rose 1.99% to close at Rs 484.90 on Friday on the Bombay Stock Exchange, while the Exchange’s benchmark index lost 0.97% to close at 17,192.82.