Price hike impact will be seen next quarter, says Varun Berry after Britannia’s net Q1 falls 11%

• The biscuit maker Britannia reported an 11% drop in net profit to ₹335 crore as compared to the same quarter last year.
• The company’s managing director Varun Berry attributed this fall in profits to global factors that eventually impacted the commodity prices in the country.
• The company’s fortunes in the next quarter will depend on the monsoon and Kharif season that will determine the extent of rural recovery.

Commodity price inflation ate into the profits of biscuit maker Britannia, as it reported an 11% drop in net profit to ₹335 crore as compared to the same quarter last year. Its revenues rose marginally by 4% to ₹3,700 crore in the same period.

The company’s managing director Varun Berry attributed this fall in profits to global factors that eventually impacted the commodity prices in the country.

“On the cost and profitability front, global factors continued to impact the economy, which led to further surge in inflation during the quarter. Certain commodities, relevant to bakery business, such as wheat and industrial fuel witnessed steep sequential inflation during the quarter ranging between 15 and 20%,” said Berry during an analyst concall.

The company had passed some of these cst pressures to the consumers as price hikes. “While we actioned necessary price increases to cover this, the full impact of price correction should reflect in the ensuing quarter,” he said.

The company’s fortunes in the next quarter will depend on the monsoon and Kharif season that will determine the extent of rural recovery.

In the meanwhile, the FMCG player enhanced its rural footprint by adding around 27,000 rural preferred dealers. During the quarter it launched new products -- Biscafe, Bourbon Vanilla Cheesecake, Nutrichoice Seeds & Herbs.

SEE ALSO: Markets get wary of heights after a 6-session streak, slip into the red
VI betting on tariff hike as it lost over $10 million every day in Q1 FY23