INDIA – Indian biscuit maker Britannia Industries on Tuesday reported a 40.4 per cent decline in consolidated net profit at ₹555.66 crore (US$67M) for the third quarter ended December 2023.

This is compared to ₹932.40 crore (US#112M) in the October-December quarter a year ago, Britannia Industries said in a BSE filing.

Britannia Industries (BIL) is one of India’s leading FMCG companies. The company’s principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products.

The company attributes the decline in net profits to subdued rural demand and elevated competition from smaller packaged food makers.

However, the Jim Jam and NutriChoice biscuits maker’s net sales grew 2.2 per cent to ₹4,191.83 crore (US$505M) against ₹4,101.49 crore (US$494M) in the year-ago period.

Profit before tax stood at Rs 758.23 crore (US$91.4M), registering de-growth of 34% YoY while the company’s operating profit was at Rs 743 crore (US$69.5M) for the quarter ended 31 December 2023.

On 9-Month basis, the company’s consolidated net profit declined 9.16% to Rs 1601.53 crore (US$193M) despite 3.63% increase in revenue from operations to Rs 12,532.14 crore (US$1510M) in 9M FY24 over 9M FY23.

“In a progressively recovering demand environment with heightened competition, our performance this quarter reflects our resilience and competitiveness,” said Varun Berry, the Vice Chairman & Managing Director.

He highlighted that over the last 24 months, Britannia achieved a robust 19 per cent growth in revenue, coupled with a commendable 52 per cent increase in operating profit.

The weak earnings come in the face of intense price competition. The company has previously mentioned reducing certain product prices after competitors took advantage of declining raw material expenses to lower prices and attract more consumers.

Rural spending on treats and snacks has also been constrained by the high cost of living.

The company’s revenue from operations in the December quarter was at ₹4,256.33 crore (US$512.8M), up 1.41 per cent whereas total expenses was up 1.98 per cent to ₹3,544.42 crore. (US$427M).

“We continued to expand our direct reach and accelerate our rural journey, partnering with more than 29,000 rural distributors during the quarter. As a result, our focus states outperformed other regions in terms of growth, despite a generally subdued rural demand,” Berry said.

On Cost & Profitability front, Berry added that the company will stay vigilant of the commodity prices & evolving geopolitical situation.

We will continue to invest behind our brands and stay price competitive with a clear objective of driving market share while sustaining profitability,” said Berry.

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