Commodity price inflation has resulted in lower profit for Britannia Industries in the second quarter of 2021-22. The company posted a consolidated net profit of Rs 381.84 crore for the second quarter, down 1.33 per cent from Rs 387 crore during the first quarter and 22.89 per cent from Rs 495.20 crore in the corresponding quarter a year ago.

The company’s total income was at Rs 3,660.77 crore, up from Rs 3,492.61 crore in the same period a year ago.

“The impact of the second wave of Covid-19 started receding in the quarter and economic activity started picking up. However, inflationary trends remained rampant around the globe,” said Varun Berry, managing director, Britannia Industries.

An unprecedented inflation in the price of palm oil of 54 per cent, industrial fuel of 35 per cent and packaging material of 30 per cent led to an overall inflation of 14 per cent during the quarter, he said.

The company has initiated price hikes across its portfolio to mitigate the inflation impact.

"While we have been able to partially mitigate the impact through strategic forward covers and accelerated cost efficiency programs, we have also initiated necessary price increase across portfolio all of which will address cost push and normalise profitability," said Berry.

On a consolidated basis, cost of raw materials consumed during the quarter was at Rs 1914.72 crore, compared to Rs 1768.12 crore during the corresponding quarter previous year.

Britannia scrips at Rs 3718.80 crore were up 1.89 per cent over the previous close at Bombay Stock Exchange. The bottomline during the quarter was lower than market estimates.

"We continued to focus on increasing direct distribution and improving our rural footprint. We are confident that our resilient brands and strategic growth initiatives will hold us on a path of profitable share gain in the future as well," said Berry.

During the quarter the company expanded its snacks, wafer and cake categories.