FMCG major Britannia Industries Ltd on January 28 reported a consolidated net profit of Rs 371 crore for the third quarter ended December 2021, lower by 19 percent from Rs 456 crore bottomline reported a year back. The company had recorded a post-tax profit of Rs 384 crore in the previous quarter.
Consolidated revenue from operations for one of the oldest biscuit makers in the country stood at Rs 3,575 crore, up 13 percent, compared to Rs 3,165 crore reported in the year-ago period. Revenue in the preceding quarter was Rs 3,607 crore.
“We delivered a high single digit volume growth significantly ahead of the market and a resilient double-digit top-line growth of 13%, driven by superlative performance across Divisions and Channels", said Varun Berry, Managing Director.
Adding, "While the rural markets across FMCG witnessed significant slowdown, we were able to maintain a significant competitive advantage through our focus to enhance rural footprint and our diligent market practices, which is reflected in the robust topline growth and consistent gain in market share."
Berry further said the company was confident its resilient Brands and strategic growth initiatives will hold Britannia on a path of sustainable and profitable share gain in the future as well.
Higher costs of agri-commodities and packaging materials, coupled with lower in-home consumption, dented the earnings in this quarter despite the price increases taken by the company.
Britannia continued to face inflationary pressures on input costs as cost of raw materials as a percentage of revenue from operations, increased by 400 bps on year to 51 percent. On a sequential basis however, there was a reduction of 200 bps.
The company was able to save on its employee costs during the quarter which as a percentage of operating revenues declined by 60 bps year-on- year and by 70 bps on-quarter.
Other expenses declined marginally by 40 bps on-year to 19.2 percent as percentage of operating revenues, but on a sequential basis, there was an increase of 150 bps.
“On the cost front, we continued to witness increase in commodity prices with an inflation of ~4% sequentially (quarter on quarter) and ~20% over last year”, added Berry. “As market leaders, we actioned price increases ahead of competition. However, the upward trajectory in prices of commodities and fuel impacted profitability, which led us to action further price increases and accelerate cost efficiency programs”.
Higher input costs resulted in a 12 percent YoY decline in EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 538 crore compared to Rs 612 crore in the same quarter a year ago. On a sequential basis, the EBITDA has declined by 4 percent.
Consequently, the EBITDA margins for the quarter contracted by 430 bps year on year to 15 percent while on a sequential basis, there was a marginal reduction of 40 bps.
The net margins at 10 percent were lower by 400 bps on-year and 30 percent on quarterly basis.
The stock of Britannia Industries closed at Rs 3,509.65, up Rs 15.50, at the National Stock Exchange on January 28. The stock has been trading flat for the past one year as well as over the past one month.
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