Britannia Q1 net doubles, to invest Rs 150 crore on capacity expansion, advertising and promotions

KOLKATA: Britannia Industries plans to invest Rs 150 crore this fiscal on capacity expansion, including a new plant in Gujarat, expansion of distribution, advertising and promotions this year to maintain its growth momentum despite the economic slowdown.

This kind of investment will help the biscuit maker continue its growth despite the tough macroeconomic environment, its managing director Vinita Bali said while announcing that Britannia’s net profit doubled in the first quarter ended June.

“We have been increasing our capex in the last 2-3 years than the Rs 50 crore we usually used to invest annually,” Bali said. “Even last fiscal, we had set up two plants in the east apart from expanding capacity in our contract manufacturers.”

Britannia almost doubled its net profit to Rs 86.29 crore in the first quarter, up from Rs 43.45 crore a year earlier. Its net sales increased 14.8% to Rs 1,403.44 crore during the quarter. Bali attributed the profit growth to improved product mix, higher price realisation, stable commodity prices and effective cost management.

She said the upcoming biscuit plant in Gujarat will go on stream next quarter and will incur an investment of Rs 50 crore.

Bali, who has been given the specific responsibility of handling Britannia’s international business after Varun Berry joined in May as the COO with responsibility for domestic operations, said the company will increase its overseas business.

“The international operations used to report to me before too. The business clocked Rs 40- crore revenue last year and we also entered Saudi Arabia for the first time. We would further grow the business this year,” Bali said.

Apart from the international business, Bali said there is big potential in the dairy business, which has quadrupled sales in the last five years. “As of now, dairy is just 10% of the revenue and the potential is large,” she said.