Britannia Q4 profit rises 4%, plans ‘calibrated’ price hikes

Britannia Industries Ltd, India’s largest bakery foods company, has reported a 4% rise in consolidated net profit for the three months ended March 2022 to Rs 380 crore.

The Nusli Wadia Group company had reported a consolidated net profit of Rs 364 crore in the corresponding period last year.

The bottom line was higher than analysts’ estimates of around Rs 350 crore, but lagged the double-digit growth in sales due to pressure on margins.

FMCG companies have been facing the brunt of a rise in raw material costs, but have not been able to pass on the full impact as the Indian economy is still facing the hangover of COVID-19.

The company’s sales grew 15% from a year earlier to Rs 3,508 crore, exceeding expectations of around Rs 3,400 crore.

Consolidated operating profit grew 10% on year to Rs 499 crore.

The board recommended a dividend of Rs 56.5 per share.

MANAGEMENT COMMENTARY

“The economy was impacted by global geo-political factors which caused further surge in inflation this quarter. We continued to take price increases judiciously and remained aggressive on cost front…We shall further take calibrated price increases and drive cost leadership to manage profitability,” Britannia Managing Director Varun Berry said.

“In this quarter, we delivered a robust top-line growth of 15% and a mid-single digit volume growth which demonstrates the resilience of our brands and a reflection of our execution strengths across divisions and channels,” Berry said. 

“Our new dairy greenfield factory is on track for commercialization in the next few months. In addition, we are also in the process of setting up three greenfield units - in Uttar Pradesh, Tamil Nadu and Bihar,” he said.