Bengaluru: Biscuit maker Britannia Industries Ltd posted a 4.6% increase in third-quarter net profit to Rs220.39 crore from a year earlier, beating analyst estimates.
Revenue rose 6.11% to Rs2,355.27 crore during the period, but fell short of the company’s own expectations, Britannia said in a filing with the BSE on Monday.
The analysts had expected a net profit of Rs198.10 crore on revenue of Rs2,137.50 crore, according to a Bloomberg survey.
“This quarter has been really tough considering the way things panned out on the economic front. The positive growth momentum witnessed in Q2, aided by good monsoon and flow through of 7th pay commission benefits was impacted with implementation of demonetisation in November,” Varun Berry, managing director, said in a statement.
Like other consumer firms, the post-demonetisation liquidity crunch had hurt its consumers and channel partners, the company said, adding that it had attempted to tide over the situation by providing credit to some business partners and improving sales efficiency.
“With these steps and increase in availability of cash in the economy, our revenues in December 2016 improved on a sequential basis but is still lower than what we would have expected it to be,” Berry said.
Growth in the international business continued to be under pressure due to deteriorating geopolitical situation and currency fluctuations in geographies like Middle East and Africa, he added.
Britannia, which had to deal with a high raw material inflation rate of more than 10% in the December quarter, said its cost efficiency program had helped mitigate the impact of higher raw material costs to a “certain extent.” It also “rationalized” advertising spends as no amount of stimulus would have helped the company boost growth after demonetisation.
“We are actively working on opportunities in the biscuit business, adjacent macro snacking space and are also evaluating partnership opportunities to drive profitable growth for our company,” Berry added.
In a separate filing, Britannia said it appointed YSP Thorat, retired chairman of National Bank For Agriculture and Rural Development (NABARD), and Ajay Shah as additional directors of the company effective 13 February.
Britannia Industries Limited’s shares closed up at Rs3,273 on the BSE, up 1.15% from previous close while India’s benchmark Sensex Index was up 0.06% to 28,351.62 points.