The continuous price hikes by the FMCG companies as they battle inflation, have not hurt the segment, indicated Varun Berry, the CEO and MD of Britannia Industries while addressing an investor call after reporting first quarter results on August 4.
According to Berry, while the company’s management was nervous about the inflation in the initial days, however, the results on the ground show that consumers today can absorb these shocks and that is reflected in their purchase behaviour. “We feel more confident than we were in the last six months,” he added.
Britannia Industries, according to the CEO, has taken more than 20 percent price hikes across its product segments in the last six months due to unabated inflation in key commodities such as palm oil, wheat, packaging products etc. The company hiked the prices of its products in the first quarter ended June (Q1) too.
“This was probably the quarter with the steepest inflation. We took some price increases in Q1 but were unable to pass on the total cost increase so will take some more hikes in Q1. Collectively, we have taken a 7 percent price hike in the Q1 and Q2 of FY23,” he added.
Britannia Industries' bakery business has been burdened with inflation to the tune of Rs 180 crores since last quarter of FY22 till date, indicated the CEO. The company’s sales volumes have suffered as a result. In Q1, its sales volumes decline by 2 percent.
“The number of packets that we sell is flat, and we are hopeful that we will start to grow once again,” he said.
Britannia Industries reported an 8.7 percent year-on-year (YoY0 jump in its consolidated revenue for Q1 to Rs 3,701 crore as compared to Rs 3,403 crore reported in the year-ago period. The company’s net profit for the period fell by 14 percent YoY to Rs 337 crore as opposed to Rs 389 crore reported last year in Q1.
The profit for the quarter missed the CNBC-TV18 estimates of Rs 410 crore by 18 percent.