The massive increase in operating profit, Britannia said, was due to the cost cutting measures put in place by the company.

Different britannia products such as toasties good day 5050 marie gold jim jam on display
Money FMCG Friday, July 17, 2020 - 17:14

Food products company Britannia Industries on Friday reported a 26% growth in its consolidated revenue for the April-June quarter, and said that net profit had increased by 117%. The company’s revenue for the first quarter of FY21 stood at Rs 3,384 crore, and net profit at Rs 546 crore as opposed to Rs 251.03 crore in the same period last fiscal. 

The massive increase in operating profit was due to the cost cutting measures put in place by the company, Varun Berry, Britannia’s Managing Director said.

“On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest. Given the dynamic nature of the pandemic & associated uncertainty, we were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastages and fixed costs leverage,” Berry said. 

He further added that the company rationalised media spends “considering the constraints of inventories due to higher market demand”. 

This quarter was almost entirely under lockdown because of the pandemic. Berry said that the quarter posed an uphill task and the caused significant disruptions, leading to the supply chain being impacted. 

For the quarter, the EBITDA rose to Rs 717.4 crore in April-June period from Rs 395 crore in the corresponding period last year.

“Factories, depots, transport and vendors across the supply chain were impacted. Our top priority was to ensure safety of our employees and the ecosystem we work with, for which we laid out clear & stringent standard operating procedures and implemented them meticulously,” he said. 

After the lockdown eased, the MD said that they aimed to bring back their distribution to pre-COVID levels and increasing access in rural and remote areas of the country. 

Britannia’s products include biscuit brands such as Good Day, Nutri Choice, Tiger and Bourbon, dairy products like cheese, bread, cakes and rusks. Biscuits, which are a major chunk of Britannia’s sales, saw some of their best sales periods during the lockdown, as it is an easy snacking option. 

According to reports, Britannia saw an increase of 300-basis point improvement in volume growth in biscuit sales in April and May as opposed to the pre-Covid period.

Show us some love and support our journalism by becoming a TNM Member - Click here.