Inflation took us by suprise in Q2: Britannia's Varun Berry

Bakery and dairy products maker Britannia Industries on Monday reported a 5.79 percent increase in consolidated net profit at Rs 233.95 crore for the second quarter ended September 30, 2016. The company had posted a net profit of Rs 221.13 crore in July-September period a year-ago, Britannia Industries said in a BSE filing. The number failed to top Street estimates and the company blamed deteriorating geopolitical situation and forex fluctuations for the hit on growth.

Britannia's consolidated total income from operations was up 11.45 percent to Rs 2,456.10 crore during the quarter under review as against Rs 2,203.71 crore of the corresponding quarter of the previous fiscal.

Commenting on the second-quarter performance, Britannia Industries MD Varun Berry said while the volume growth was solid and biscuits, cakes and rusk segment saw double-digit growth, volume decline in bread segment impacted growth.Berry added that inflation took the company by a surprise during the quarter. He said the company had targeted a 6 percent inflation but didn’t factor in a larger inflation number. Corrective measures taken during the year weren’t enough to wipe out the deficit caused by inflation, he added.

The company is now targeting double-digit inflation and will have to put in place another price hike and induce cost-saving measures, he said.