FMCG major Britannia Industries hopes that the fiscal 2025 will see commodity inflation at manageable levels.
“Outlook on this year is not deflationary but of healthy inflation,” said Varun Berry, MD of Britannia, in a post-earnings concall. The company projected inflation at 3 percent for FY25.
Britannia noted that the wheat crop appears to be in good condition, with government reserves relatively low. However, government buying for various programmes is expected to indicate a potential for wheat price hike across the year, especially after the elections. Additionally, sugar production hasn't been robust, suggesting a likelihood of inflation in sugar prices as well.
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“We are making sure that we take whatever interventions that are required to get to our planned numbers as far as quality is concerned,” the management noted. The company has started to buy and also made sure that they have a full programme in place to get the best prices for the commodities that they buy.
The management noted that the challenging economic conditions from last year are expected to persist for a few more months, but with the onset of the monsoon season and election outcomes, improvements are anticipated. "I would say the task for us is to make sure that the topline grows much faster as we go forward and that's what we are going to focus on in." said Berry.
Read more: Britannia Q4: Net profit falls 3.8% to Rs 537 crore, revenue up marginally
The company is prepared to endure short-term margin adjustments due to ongoing projects and initiatives. However, this won't deviate significantly from their current position. The management noted that the primary aim is to ensure future readiness, fortifying the business model for long-term benefits.
The company is aiming for a double digit volume growth this year.
Britannia believes that the market is poised for a return to growth. Over the past decade, many businesses, including Britannia, have experienced subdued volume growth compared to previous years of booming revenues. The management anticipates that the current economic climate will soon yield positive outcomes for consumer businesses. Despite some challenges along the way, Britannia forecasts a resurgence in growth this year, driven by the improving economic conditions in the country.
Britannia's core focus remains on its biscuits segment, constituting a significant portion of its business. The management said while continuing to prioritize biscuit growth, Britannia emphasizes accelerating the expansion of its adjacency businesses, aiming for a growth rate one and a half times higher than its biscuit portfolio.
This year, the company intends to concentrate less on venturing into new product categories. Instead, the company seeks to consolidate its position in the existing categories, aiming to strengthen its presence and influence within them, the management said.
Britannia on May 3 reported a consolidated net profit at Rs 536.61 crore for the March quarter, registering a decline of 3.76 percent from Rs 557.60 crore in the same quarter of the previous financial year.
The total revenue of the company stood at Rs 4,069.36 crore, rising 1.14 percent from Rs 4,023.18 crore in the year-ago quarter, the company said in a regulatory filing.
(This is a developing story, please come back for updates)
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