Mondelez India's net profit jumps 47% to Rs 3.26 billion in FY18

Its revenue stood at Rs 61.2 billion, 6% higher than Rs 57.5 billion in 2016-17

Mondelez India, the maker of popular Cadbury brand of chocolates, posted 47 per cent growth in net profit during 2017-18 financial year. The firm’s profit rose to Rs 3.26 billion year-on-year from Rs 2.22 billion, data available at Registrar of Companies (RoC) show. 

Its revenue stood at Rs 61.2 billion, 6 per cent higher than Rs 57.5 billion in 2016-17. While it was higher than the previous two financial years, records reveal Mondelez’s sales remained lower than the 2014-15 level when it had raked in Rs 65.1 billion in sales. 

While the firm enjoys over 65 per cent share of the Rs 85-billion local chocolates market, its 2017-18 sales growth remained below par the industry that is growing in double digits. 

Nestlé India, second-largest player in the market, grew by 4.3 per cent during 2017. The Swiss firm holds over 14 per cent and 61 per cent of the chocolate bars, and wafer and confectionary markets in India, respectively. It gets over 12 per cent of its yearly Rs 100 billion revenue from the segment. 

According to data from RoC, Mondelez’s global rival Hershey posted 18 per cent growth in sales in 2017-18 to Rs 3.18 billion. However, Mondelez’s bottom line improved in the past two years. While Hershey is in red at least since 2014-15, the company that markets top-selling products such as Cadbury Dairy Milk and Five Star bars improved its net profit margin to 5.3 per cent – highest in the past four years.

Low commodity prices helped it improve its margin, despite single-digit rise in its sales due to lower volume uptake, said industry experts. 

The chocolates market in India is dominated by foreign multinationals, except Amul. While the 70-year-old Mondelez India continues to grow its business, analysts said the players are yet to unlock full potential of the market.

Per capita consumption by Indians remain much lower than most other large economies. While India’s per capita chocolate consumption stands at 110-120 grams a year, it is the least among most key markets across the world, including the US, the UK, China, Japan, and Indonesia.

On an average, the overall chocolate market has been growing at 11-12 per cent per annum, with the premium chocolate market in particular growing at a faster clip, at 20-25 per cent per annum, said experts.