Britannia's margin cookie crumbles in Q1 as inflationary pressure weighs

Inflationary pressure and competitive intensity could impact the profitability of biscuitmaker

Britannia Industries’ April-June 2019 quarter showing was impacted by slowdown in consumption demand and inflationary pressure. The biscuitmaker reported a 5.9 per cent year-on-year (YoY) growth in consolidated net sales to Rs 2,677.3 crore, while its net profit fell by 3.7 per cent YoY to Rs 248.6 crore. Net profit also saw additional impact of a one-time cost of Rs 15.6 crore on account of voluntary retirement cost.

Notably, Britannia’s rural business, which was earlier growing 1.5x faster than urban, grew slower than its urban business in the quarter. The company, which has 32 per cent exposure to the rural