India (Common wealth) _ Britannia Industries of India announced a near-36% increase in quarterly earnings as the maker of Marie Gold biscuits stocked up its products at mom-and-pop stores throughout rural regions.
Britannia, which also offers cakes and bread, earned a consolidated profit of 4.58 billion rupees ($55.4 million) in the first quarter ended June 30, up from 3.37 billion rupees the previous year.
Chocolate and biscuit sales have bucked inflation-driven volatility in demand for branded consumer items like cooking oil and tea. Britannia has also expanded its dealer network, notably in rural India, and increased its spending on new product launches and advertising to entice customers. Revenue from operations increased by 8% to $40.11 billion as a result of the initiatives.
Nestle India, meanwhile, exceeded quarterly profitability estimates thanks to pricing rises and increased demand for its chocolates and packaged items, notably Maggi noodles. However, sales for the July-September quarter could be hampered because prices for several necessities, including as milk and tomatoes, have remained stubbornly high in recent months.
Britannia’s shares closed practically flat before the results on Friday, with a year-to-date increase of more over 11%. According to Varun Berry, the company’s executive vice-chairman and managing director, local rivalry has increased as commodity prices have fallen. In light of this situation, various price corrections were implemented in order to remain competitive and generate top-line growth while retaining profitability. According to Berry, robust distribution gains combined with necessary brand expenditures supported Britannia’s revenue growth.
We continued to demonstrate careful market procedures and solid on-the-ground execution, which reflects in our rural success in the face of generally sluggish rural demand. Other consumer goods makers, including Hindustan Unilever Ltd., Dabur India Ltd., Marico Ltd., and Nestle India Ltd., have also emphasized the resurgence of local brands, which struggled in the aftermath of Covid-19, and how they are treading on the turf of FMCG giants.
According to a recent Kantar survey, the volume growth of local brands outpaced that of national brands significantly over the 12-month period ending April 2023 Local brands, defined as those operating within a single market, saw volume growth of 12.7% during the period, while national brands saw an 8.2% increase. HUL, the country’s largest consumer products manufacturer, stated that it lost market share in some areas of its portfolio, notably in the mass market.
Britannia stated that it had made significant headway in its quest to construct technologically better industries. “We efficiently scaled up our new greenfield projects in Tamil Nadu and Uttar Pradesh.” With planned capacity and capability increases in Ranjangaon Food Park, we are well-positioned to extract productivity and boost competitiveness in these markets.” Before the results were revealed, Britannia shares closed 0.27% higher at Rs 4,803, compared to a 0.75% increase in the benchmark BSE Sensex. The results were announced after the market closed.
Britannia Industries Limited, a large FMCG company, stated that the food sector in which it works has been adversely impacted by high commodity costs, rising interest rates, and the fallout from the Russia-Ukraine crisis. The long-term repercussions of these issues are still being felt heavily, according to the company’s annual report for 2022-23. It stated that, despite unpredictable commodity prices and extraordinary inflation, the post-Covid normalization of economic activities will underpin growth during 2022-23. ADVERTISEMENT According to the company’s annual report, the biggest problem confronting the food business during the previous fiscal year was managing inflation in the cost of essential commodities such as wheat, milk, sugar, palm oil, and crude oil.
