As branded consumer goods makers face tough competition from smaller rivals that offer cheaper alternatives, India's Britannia has reported quarterly earnings below market expectations on Friday.
Furthermore, Britannia, which is known in the market for Jim Jam and NutriChoice biscuits, has reported a consolidated net profit of Rs 506 crore for the first quarter which ended on June 30. If we look back a year earlier, it stood at Rs 458 crore. On average, analysts had expected a profit of Rs 536 crore, according to data from LSEG.
Moreover, to put up a tough fight with branded rivals, regional consumer goods manufacturers in India are building on easing commodity prices. This included Dove soap manufacturer Hindustan Unilever and Britannia This has forced them to cut prices to protect market share. However, the move was not enough to fend off competition fully for Britannia.
Slowing from a more than 8% increase in the corresponding quarter a year earlier, Britannia's revenue has increased 6 percent to INR 425 crore during the quarter. As the total expenses rose by 4.5 percent, the Managing Director Varun Berry highlighted that Britannia "is vigilant of the commodity price fluctuations."
And if we speak of Dove soap manufacturer and Hindustan Unilever, they reported higher earnings due to the product price cuts which led to increased demand. While price increases drove consumers away, KitKat manufacturer Nestle India has reported its slowest growth in eight years.
