Britannia Industries will respond to rising inflation with higher grammage cuts rather than higher prices, the company said. The biscuit giant raised prices by 10 per cent in the 2021-22 financial year (FY22) and reduced package sizes as an indirect way to raise prices. Last fiscal year, the grammage reduction rate was 65per cent and will be even higher in FY23.

Management said it would raise prices by 10 per cent if current raw material price levels were maintained.
The company’s cost efficiency has also improved over the years and is now five times more cost-efficient than in fiscal 2014. One problem Berry highlighted was the country’s lower-than-expected wheat production due to extreme heat. In addition, the crises in Ukraine and Russia will affect global wheat supplies.

In the Hindi heartland, Chhattisgarh and Rajasthan saw declining company performance, but Berry told investors that these states were areas of opportunity for companies to regain growth. In the March quarter, the company witnessed mid-single-digit volume growth while reporting a 4.3 per cent year-on-year rise in net profit to Rs 379.9 crore as higher raw material costs weighed on margins. The cost of raw materials consumed rose 21.3per cent to Rs 1,858.7 crore in the quarter, while its profit margin was 17 per cent compared to 18.2 per cent a year earlier.
The Good Day biscuit maker’s fourth-quarter operating income rose 13.4 per cent year-on-year to Rs 3,550.5 crore.