Fast-moving consumer goods (FMCG) major Britannia Industries registered a 27.32 per cent increase in its net profit at Rs 41.80 crore for the quarter ended June 30, compared with Rs 32.83 crore during the corresponding period of the last financial year. The company's net sales during the period saw a rise of 21.36 per cent at Rs 1,106.29 crore, against Rs 911.54 crore in the first quarter of the last financial year.
The company, which is reeling under the pressure of food inflation, is working towards improving its margins, a top company official said.
"Low margins are something peculiar to the bakery industry. We want to improve the quality of margins. The high prices of wheat, sugar and other ingredients are affecting it,” said Britannia Industries Managing Director Vinita Bali, adding, "Margins can be improved by a mix of brands, products, geographies, cost effectiveness and efficiency."
The company, which sells biscuits and dairy products, had a net profit margin of 2.9 per cent in the last financial year.
According to Bali, despite the spiralling prices of food items, the company did not raise the prices of products, but absorbed it. "The profitability was maintained by way of revenue and cost management, " she said.
When asked about the possibility of any price rise, she said, "Pricing is a dynamic variable which we see in the context of our input costs and cost efficiencies. We keep adjusting prices over the entire year and we do it for different brands and different pack sizes at different points in time." The company is also looking at commissioning new units in Bihar and Orissa in the coming months to ramp up its production base in the country.
Speaking on the consolidation of the company's subsidiaries, Bali said, "Consolidation had already taken place regarding subsidiaries. West Asian operations and bread businesses are fully owned by Britannia. There are some entities through which no transactions take place, and these would probably collapse over a period of time."