As demand for packaged food continues to be strong, Britannia on Monday posted a healthy 23 per cent increase in net profit for the quarter ended September 2020 at Rs 495.20 crore as compared to the corresponding quarter a year ago. The company’s consolidated revenue rose 12 per cent yoy to Rs 3,492.61 crore, slightly lower than the Street’s expectation of 14 per cent.
“Covid-19 has brought about a situation whereby we are witnessing tectonic shifts in economic growth and consumer behaviour across the world. While the government ended the lockdown, it will take a while for the situation to normalize,” said Varun Berry, managing director, Britannia Industries. “These times have reinforced the importance of giving back to the society and community at large and we are making headway into creating a business which conjoins sustainability & profitability,” he said.
The Bengaluru-headquartered company, which had stuck to the 80:20 strategy by focussing on 20 per cent of the products which contributed 80 per cent of volumes after the Covid-19 outbreak, got its full range of products to the market during this quarter. While it focused on efficiency in distribution, the company inched closer to normalcy in advertisement and promotions. All the adjacent businesses too, delivered a healthy profitable growth, said the company.
On a sequential basis, Britannia’s net profit fell 8 per cent, while consolidated revenue was nearly flat. In the Q1FY21, the company had reported a net profit of Rs 542.68 crore and a revenue of Rs 3,514.35 crore.
Analysts said Britannia’s Q1 performance was boosted by pantry loading/stocking of essentials during the lockdown. “However, the growth normalised in Q2 with logistics and supply chain improving across the country with the easing of lockdown norms,” said Kaustubh Pawaskar, AVP – Research, Sharekhan by BNP Paribas.
On the cost front, the company witnessed moderate inflation in the prices of key raw materials. It, however, expects the prices to be stable going forward given the positive outlook on monsoon and harvest.
Berry said the company is keeping a close watch on macro-economic factors, changes in laws, evolving consumer behaviour and “are framing our medium-term strategy laying out scenarios to deal with this dynamic environment”. “We are confident of performing well in these tough times with the agility in our action and passion of the team,” he added.