Britannia profit more than doubled during the lockdown and sales were the best in at least five quarters

• Britannia posted a 117% jump in its consolidated net profit to ₹545.7 crore for the first quarter ended June 30
• The total revenue was up 26% to ₹3,384 crore compared to the same period last year.
• The company stated in its quarterly filings that it “implemented some innovative ways of working in sales, supply chain & other support functions” during the pandemic, which supported the growth.

Biscuits and bakery products maker Britannia just posted a whooping 117% jump in its consolidated net profit to ₹545.7 crore for the first quarter ended June 30.

The total revenue was up 26% to ₹3,384 crore compared to the same period last year. With this, it surpassed the street estimate of revenue growth to be between 18% to 23% for the quarter.

The growth rate is impressive not just because it is better than most other companies, this is also better than Britannia’s record before the pandemic.

According to Motilal Oswal, its large brands like Good Day, Milk Bikis and Marie Gold have employed localized strategies to meet the unique needs of different markets and fight local players.

And the company itself admitted in its quarterly filings that it “implemented some innovative ways of working in sales, supply chain & other support functions” during the pandemic.

“Our nimble culture helped us quickly adapt to the situation & meet the market demand. As soon as the lockdown was eased, we focussed on getting our distribution back to the pre-COVID levels and increasing our rural & hinterland reach, said Varun Berry, managing director, Britannia Industries.

Investors were already hoping for blockbuster earnings from the company, and that is the reason why the stock is up over 42% since March 31.

Operating during the lockdown wasn’t cheap

“On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest. Given the dynamic nature of the pandemic & associated uncertainty, we were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastages and fixed costs leverage,” said Berry.

Despite the increase in costs, Britannia reported a massive 670 bps increase in operating profit margin during the quarter. A hundred bps make up 1%.

SEE ALSO: Britannia may have sold more biscuits during the covid-19 lockdown than ever before ⁠— the earnings may reflect that

Here’s how Britannia is eating into ParleG’s market share for five years now⁠— and now wants more of it