Britannia Industries Ltd, India’s largest biscuit maker, has forecasted low single-digit input cost inflation for the current fiscal year. The company made this statement during an earnings conference call with analysts. Britannia stated that it is closely monitoring input costs and will remain watchful of competitive pricing activities.
The company’s Vice-Chairman and Managing Director, Varun Berry, told analysts that Britannia’s plan takes into account the low single-digit inflation of around three percent for FY’24. “We are now in a phase where inflation is going to be moderate and not what we’ve seen in the last two years,” he said. Berry also mentioned that the company is well-equipped to deal with any challenges that may arise from inflation, given its strong supply chain management and cost management practices.
Britannia’s focus on cost management has been evident in recent years. In 2021, the company undertook several initiatives to reduce costs, including the consolidation of manufacturing facilities, increasing automation, and reducing workforce. The efforts paid off, with the company reporting a 28.8 percent year-on-year increase in its net profit for the January-March quarter of FY21-22.
The biscuit maker’s revenue from operations during the fourth quarter of FY21-22 stood at Rs 3,164.3 crore, up 11.8 percent from the same period in the previous year. Its net profit for the quarter was Rs 419.6 crore, up from Rs 389.7 crore a year ago. Britannia’s revenue growth was driven by a strong performance in the biscuits segment, which accounts for over 80 percent of its revenue.
The company has been investing in new product launches and marketing initiatives to drive growth. It recently launched a range of nutri-snacks under the brand name NutriChoice, which targets health-conscious consumers. The company has also been expanding its presence in rural areas, where demand for biscuits is growing.
Despite the challenges posed by the pandemic, Britannia has maintained its market leadership in the biscuits segment. The company has been expanding its product portfolio to cater to changing consumer preferences. It has launched several new products in the past year, including croissants, cakes, and wafers.
In addition to expanding its product portfolio, Britannia has also been focusing on sustainability. The company has set ambitious sustainability goals, including a commitment to source 100 percent of its wheat from sustainable sources by 2025. It has also launched initiatives to reduce food waste and promote sustainable agriculture practices.
Britannia’s announcement comes amid rising concerns over inflation in India, particularly due to high fuel prices and supply chain disruptions caused by the Covid-19 pandemic. The company has said that it has already taken steps to mitigate the impact of rising input costs, including optimizing raw material sourcing, product mix and pricing.
In the past year, Britannia has also focused on expanding its distribution network and product portfolio to drive growth. The company has launched new products such as cake bars, sandwich biscuits and milkshakes, and has expanded its presence in rural areas. Britannia has also increased its digital marketing and e-commerce efforts to reach more consumers.
Despite challenges posed by the pandemic, Britannia reported a strong performance in the fourth quarter of FY’21, with net profit rising 2.6 per cent year-on-year to Rs 360.07 crore. The company’s revenue increased by 9.2 per cent to Rs 3,130.81 crore, driven by volume growth of 5 per cent and price hikes in select categories.
Britannia’s outlook for FY24 is positive, with the company expecting low single-digit input cost inflation. The company’s focus on cost management and product innovation, coupled with its strong market position, is expected to drive growth in the coming years. However, the company will need to remain vigilant and agile in the face of changing market dynamics and consumer preferences.
