Expects double-digit volume growth in the current fiscal year and is constructing businesses adjacent to it. During Britannia’s post-Q4FY24 earnings call on Monday, executive vice-chairman and MD Varun Berry stated that the country’s fast-moving consumer goods (FMCG) market is expected to grow again in FY25. Berry cited the sector’s favorable outlook for this year’s monsoon and stable economy as well as the June election results.
During a post-Q4FY24 earnings call on Monday, Varun Berry, the executive vice-chairman and MD of Britannia, voiced optimism, saying that a recovery in the domestic fast-moving consumer goods (FMCG) industry is expected in FY25. He listed several positive indicators for the industry, including the steady state of the economy, the upcoming June election results, and the likelihood of favourable monsoons this year.
The Bengaluru-based company anticipates a modest first quarter of FY25 growth, with a strong pick-up in speed by the second half of the year. The company’s revenue is derived from biscuits, accounting for 75% of its total sales, and non-biscuit categories such cakes, rusks, dairy goods, and bread for 25%. In addition, the company is developing a new Route-to-market (or RTM 2.0) model with the goal of expanding its non-biscuit or adjacent companies at a rate 1.5 times faster than its core biscuit portfolio.
A growing FMCG market should also assist the company in returning its focus on attaining double-digit volume growth, with price-led growth probably coming in at around 3%, given the inflationary concerns surrounding the company’s major ingredients, wheat and sugar.
“Over the past decade, many businesses, including Britannia, have experienced subdued volume growth compared to the previous decade when revenue and volume growth were booming for consumer businesses. I believe that the tide is changing and that the current economic environment will be positive for consumer businesses,” Berry said.
FY25 will see Britannia’s top line increase. We are prepared to somewhat give up profits in order to create a business that is ready for the future, even though we are continuously watching commodity inflation,” he continued. Berry stated that pricing moves would be “measured” to stay competitive in the face of fierce competition from local and small businesses.
Responding to an investor query on commodity inflation Berry said,“We are making sure that we take whatever interventions are required to be taken to get to our planned numbers for the year (FY25). We have a complete programme in place to get the best price for the commodities we buy.”
According to Berry, Britannia saw 6% volume growth in Q4FY24 and increased market share in the biscuit segment. This occurred at the same time that the business announced a 3% year-over-year increase in consolidated revenue to Rs 4,014.07 crore in the March quarter and a 4% year-over-year decline in consolidated net profit to Rs 536.61 crore. According to its results released on Friday, Britannia’s profits before interest, taxes, depreciation, and amortisation (Ebitda) decreased 1.92% on a yearly basis to Rs 785.5 crore in the fourth quarter.
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