Britannia Industries reported a 14% increase in profit for the first quarter, although this figure fell below market expectations. The reason was the rise in fuel and delivery costs associated with tensions in West Asia, which affected the company's margins and revenues.
Consolidated profit for the quarter ending June 30 increased by 14%, reaching 5.91 billion rupees (equivalent to 62.07 million US dollars). Analysts, according to LSEG data, had forecast an average profit of 6.05 billion rupees.
The conflict between the US and Israel regarding Iran has led to increased costs for energy, freight, and raw materials for corporations worldwide, forcing companies to raise prices on various goods, including packaged foods and tires.
Rakshit Hargave, CEO and Managing Director of Britannia, stated in a release: 'The year started with the conflict in West Asia, which led to a sharp increase in the cost of fuel and transportation expenses at our domestic and international operations.'
During the quarter, the cost of raw materials consumed by Britannia increased by 10%, amounting to 28 billion rupees. Hargave also noted: 'We continue to closely monitor the evolving geopolitical situation in West Asia and crude oil volatility for potential impact on international operations and domestic production costs.'
The company's revenue increased by 8%, reaching 50 billion rupees, exceeding analysts' forecasts of 49.86 billion rupees, thanks to increased sales volume.
Compared to competitors, packaged food manufacturers Tata Consumer Products and Nestle India reported profit growth, while cigarette manufacturer Classic ITC and owner of Dove Hindustan Unilever recorded declines in their figures.
Before the publication of the results, Britannia shares slightly decreased, leading to an overall drop in quotations of about 10% this year.
