Impacted by high input costs, Britannia Industries’ net profit for the quarter ended December 31, 2009, declined 36.95 per cent due to Rs 29.10 crore, compared with the corresponding period in the previous financial year. The company, which has a product portfolio of biscuits, bakery and dairy categories, has hinted at a price increase if cost inflation continues.
Net sales saw an increase of 7.71 per cent to Rs 881.39 crore. Operating profit, however, dropped 44.23 per cent to Rs 32.72 crore as expenditure on advertising and sales increased 30.26 per cent to Rs 70.51 crore.
“An unprecedented inflation in commodities has challenged industry margins. While we have continued to insulate our consumers from this cost inflation, profits and profitability have been adversely impacted. All-round cost effectiveness and improved sales mix will remain the building blocks of Britannia’s profit improvement plan. But, if the current situation continues, judicious price increases may be inevitable,” Managing Director Vinita Bali said.
During the quarter, the company launched ‘Actimind’, which is a milk-based health drink for children. It was launched on a pilot basis in Tamil Nadu.
The company has been looking at an extended presence in the health segment, too. According to sources, around 50 per cent of the total revenues of Rs 3,000 crore comes from products in the health and nutrition category. In this, the company’s primary products are Milk Bikis, Tiger and NutriChoice.