Such a strong performance presents a very high base for the company. “What we have seen in the past is once you build a base, you find ways of growing beyond that so you might not see similar growth as we go forward but we would stride to grow over that base as we go forward,” said Varun Berry, Managing Director of Britannia
Industries during an investor call on Friday.
The company, which is currently running with a stock of 2-3 days, said its nimble culture helped it quickly adapt to the Covid-19 situation and 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 and hinterland reach. During this period, we also launched ‘Winkin Cow Lassi’ and a Rs 5 layer cake pack to expand our reach. All the adjacent businesses too delivered a healthy profitable growth,” he said.
On the cost front, the company witnessed moderate inflation in the prices of key raw materials and expects the prices to be stable going forward given the positive outlook on monsoon and harvest.
“Given the dynamic nature of the pandemic and associated uncertainty, we were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastages and fixed costs leverage. We also rationalised media spends considering the constraints of inventories due to higher market demand. These measures helped us improve the shape of our business and record a massive 670 bps increase in operating profit during the quarter,” he said.
According to experts, another round of lockdown will further add to Britannia’s growth.
“With lockdown again coming back across most states, this in fact works well for Britannia
because of more in-home consumption,” said Abneesh Roy of Edelweiss Financial Services.
Company sets Rs 700 crore as capex outlay
Britannia has announced an additional capital expenditure of Rs 700 crore in the next 2-3 years. MD Varun Berry said the firm would be putting up a new plant in Bihar, Tamil Nadu and UP, which is emerging the second-largest market for Britannia. This would be the firm’s first plant in the Hindi-speaking state.