Britannia’s Q4 net profit rises 47% YoY to ₹559 crore on softer input costs

• Biscuit maker Britannia on Friday reported a net profit of ₹559 crore in Q4, rising by 47% YoY.
  
• Driving the profitability during the quarter were softer prices of inputs like palm oil and packaging materials.
  
• Britannia’s net margins also rose on both quarterly as well as annual basis by 320 bps and 340 bps, respectively.
  

Biscuit maker Britannia on Friday reported a net profit of ₹559 crore in Q4, rising by 47% YoY as softer prices of inputs like palm oil and packaging materials aided the company’s bottom line.

Britannia’s topline registered a growth of 13% YoY in Q4 to ₹4,023 crore, while for the full FY23, its revenue increased by 15% to ₹16,301 crore.

“We delivered a robust growth of 11% in this quarter on the back of significant distribution gains, which reflects our execution strength across businesses and channels,” said Varun Berry, vice president and managing director, Britannia Industries.

For the full FY23, its net profit rose 52% to ₹2,322 crore. However, the full year FY23 net profit includes an exceptional gain of ₹359 crore on the sale of a 49% stake in subsidiary Britannia Dairy to French dairy company Bel SA. Adjusted for this, the company’s FY23 net profit stands at ₹1,963 crore, with an increase of 22.7% from FY22.

Britannia also announced that its distributor network in rural areas has touched the 28,000 mark. During Q4, the company commercialised two new greenfield biscuit manufacturing units, one each in Tamil Nadu and Uttar Pradesh, alongside a brownfield expansion in Orissa. It also announced the launch of three new lines of rusk during the quarter.

Britannia’s shares closed 0.9% higher on Friday at ₹4,628 ahead of the earnings.

Britannia’s Q4 and FY23 in numbers:


Source: Company reports

Softer input costs, higher net margins

Britannia’s net margins improved on both quarterly as well as full year basis – net margins in Q4 increased 320 basis points YoY to 13.9%, while FY23’s net margins came in higher at 14.2%, registered an increase of 340 basis points over FY22.

“Input prices softened on the back of a correction in palm oil and packaging materials, while flour continued to trend higher. Our intensified cost efficiency program coupled with moderation in commodity inflation led to a healthy operating margin in this quarter,” Berry said.

Thanks to cooling inflation in input materials’ prices, Berry said that Britannia will “deploy appropriate pricing actions” to increase its market share. If inflation remains cool going forward, the company could essentially cut prices of its products if necessary.

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