Britannia Q1 Results: Profit Doubles On Cost Cuts Amid Covid-19 Pandemic
Britannia Industries Ltd.’s profit more than doubled and its margin expanded as the fast-moving consumer goods maker cut costs in a quarter that saw the pandemic stall business activity.
Net profit rose to Rs 545 crore compared to Rs 251 crore in the corresponding quarter a year earlier, according to the company’s exchange filing. That compares with a Rs 417 crore bottom line estimated by analysts tracked by Bloomberg.
- Revenue rose 26.7% year-on-year to Rs 3,420 crore against an estimate of Rs 3265 crore.
- Earnings before interest, tax, depreciation and amortisation jumped 81.4% to Rs 716.6 crore while the operating margin expanded to 21% from 14.6%
It was the first full quarter that faced the impact of disruption caused by the Covid-19 pandemic and resultant lockdowns. Britannia said factories, depots, transport and vendors across the supply chain were impacted. Biscuits was among the categories that saw a spike in demand as everything except essential services remained shut for most of April and May.
The maker of Good Day biscuits saw a moderate rise in raw material prices but expects them to remain stable on the back of a good monsoon and harvest season.
“We were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastage and fixed costs leverage,” Varun Berry, managing director, said in the statement. “We also rationalised media spends considering the constraints of inventories due to higher market demand”, he said, leading to the increase in profit margin.
The company is now studying the impact of the virus on short-term and long-term changes in consumer preferences and distribution models, he said.
Britannia gave up gains to trade unchanged at Rs 3,851 while the Nifty was up 0.6%.