India’s largest biscuit manufacturer, Britannia Industries, is set to implement selective price hikes and grammage cuts this quarter due to the Iran War impact. The move comes to shield its margins from rising costs of palm oil, laminates, fuel and freight linked to the West Asia conflict, managing director and chief executive officer Rakshit Hargave said in a post earnings call.
“We obviously will need to take some mitigation measures , and we have initiated calibrated price increases starting from this quarter. The mitigation measures include grammage adjustments and some of the packs, which are above Rs 10, will see some kind of a price increase,” Hargave told analysts.
He added that even with the small increase in price, the demand situation will remain fairly strong.
Britannia reported higher inflation in palm oil, laminates, and fuel costs, whereas wheat followed a deflationary trend. However, the company noted that domestic operations remained unaffected by fuel and gas shortage concerns from the West Asia conflict.
Hargave said that the company remains protected from immediate palm oil volatility as it has secured forward contracts for the next five months, but broader inflationary pressures are forcing the company to take mitigation measures.
Britannia has reported a 21 percent rise in consolidated Q4 net profit with its revenue grew 7.1 percent to Rs 4,686 crore.
Company’s EBITDA margin came in at 18.2 percent, down 20 basis points year-on-year (YoY) and 186 basis points sequentially.
Britannia also saw its international business revenue and profitability getting impacted during the last quarter owing to vessel unavailability and demand slowdown in those markets.
“In the last few months, because of tariffs, we had moved all the manufacturing for North America to Oman. But we have been able to move all that manufacturing gradually back to Mundra so that we will now be able to dispatch towards North America,” Hargave added.