Britannia's margins hit by food inflation
FMCG major Britannia Industries today said it was badly hit by food inflation for which the company was working towards improving the quality of margins.
August 08, 2011 / 10:06 IST
FMCG major Britannia Industries today said it was badly hit by food inflation for which the company was working towards improving the quality of margins.
"We have the desire to improve the quality of margins and the high prices of wheat, sugar and other ingredients are affecting it," Britannia Industries Managing Director Vinita Bali told reporters after the company's AGM.Low margins were peculiar to the bakery industry, Bali said when pointed out that in the last fiscal net profit margin of the company was only 2.9%. She said the operating margin was 4.4%.Bali said that margins would be improved by a mix of brands, products, geographies, cost effectiveness and efficiency.She said although the food prices had gone up, the company did not raise the prices of the products but absorbed them.However, profitability was maintained by way of revenue and cost management, Bali said."We will invest as much so as to generate a profitable growth", bali said.Bali said the company would set up greenfield bakery units in Bihar, Orissa, Karnataka and at some location in the west which was yet to be decided.Referring to subsidiaries, she said that the dairy, Middle East operations and bread businesses were 100% owned by Britannia.Consolidation had already taken place regarding subsidiaries, adding that there were some finance companies where no transactions were taking place."They only remain as legal entities which will collapse over a period of time," she said.Commenting on the dairy business, she said that the company would focus on it and in the last five years, the size of the business had doubled.Britannia would also foray into the manufacture of diabetic-friendly products, she added. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
