Britannia bucks 'sluggish demand scenario' to deliver double-digit growth

By Jim Cornall

- Last updated on GMT

Britannia produces a range of bread, biscuits and dairy products
Britannia produces a range of bread, biscuits and dairy products

Related tags Generally accepted accounting principles

Indian bakery and dairy business Britannia Industries has reported consolidated revenue growth of 10% to $325.4m (Rs. 2,224 crores) in its third quarter, and 12% growth for the year up to December 31, 2015 to $939m (Rs. 6,417 crores).

The company, which produces Britannia-branded bread and biscuit brands including Nutrichoice and Good Day, said it had achieved the growth “in a sluggish demand scenario aggravated by floods in Tamilnadu and a dampened Diwali”.

“Our strategy of focusing on execution and commercializing potential consumption opportunities helped us deliver double-digit revenue growth,” said ​managing director Varun Berry. “Our initiatives to make in-roads in our weak states have progressed very well and helped us bolster the growth.”

Britannia  said it had accelerated its innovation and premiumization drive in a bid to encourage consumer up-take and gain long-term consumer loyalty. Activity has included the launch of chocolate-coated biscuit Pure Magic Deuce, currently being test marketed in Bangalore.

New factory and R&D center

Berry also announced that the company’s new factory and R&D center in Karnataka was nearing completion.

We strongly believe our initiatives in building future-ready capability along with tight control on all elements of cost shall help us in delivering profitable revenue growth for our company going forward."

Consolidated profit from operations increased 57% in Q3 and 65% for the nine-month period at $43m (Rs. 294 crores) and $124.8m (Rs. 853 crores) respectively. Consolidated net profit increased 51% in Q3, and 18% for the nine months, at $30.4m (Rs. 208 crores) and $90.1m (Rs. 616 crores) respectively.

Net profit up 55%

Excluding the one-time profit on sale of land and building in Q2 of the previous year of $18.1m (Rs. 124 crores) (post-tax), net profit for the nine-month period increased 55%.

On a standalone basis, revenue growth was 11% in Q3 and 12% for the three quarters, at $297.3m (Rs. 2,032 crores) and $859.9m (Rs. 5,875 crores) respectively.

Profit from operations increased 66% in Q3 and 69% for the nine months at $41m (Rs. 280 crores) and $117.2m (Rs. 801 crores) respectively. Net profit increased 61% in Q3 and 17% for the nine months at $117.2m (Rs. 193 crores) and $82.6m (Rs. 565 crores) respectively. 

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