Bengaluru: Britannia Industries Ltd, the maker of Good Day and Tiger biscuits, said second-quarter profit rose 5.84% to Rs234.03 crore from a year ago. Revenue increased 11.2% to Rs2,430.28 crore in the three months ended 30 September, the company said in a BSE filing on Monday.
“We have witnessed positive momentum in the market growth over the last few months and I believe the impact of good monsoon and flow through of 7th pay commission would continue to support this trend,” Varun Berry, managing director of Britannia, said in the filing. “Our go to market strategy which entails widening our distribution network through focus on direct reach, rural market and weak states, has helped outpace the market.”
Still, profit missed analysts’ estimates of Rs243.3 crore, according to a Bloomberg survey. But revenue topped estimates of Rs2,395.40 crore.
An increase in the price of a key raw material, sugar, weighed on Britannia’s earnings. Price increases in the raw material were much higher than the company had anticipated, it said in the filing.
The company’s material costs jumped 17% to Rs1,291.71 crore from a year earlier.
While Britannia has initiated price increases and accelerated a cost-efficiency programme, the focus is on remaining competitive in the marketplace, it said.
“We are also hopeful that certain initiatives taken by the government in terms of reduction in import duties, imposition of stocking norms etc shall provide some respite from this steep inflation going forward,” Berry said.
Britannia, which competes with other biscuit makers like Parle Products Pvt. Ltd and ITC Ltd, launched two new products in the quarter - 50-50 Mathri Masti and Good Day Chocochips.