Britannia Industries Ltd has posted a 3.94 per cent increase in net profit, at Rs 43.45 crore, for the quarter ended June 30, compared with the Rs 41.8-crore profit it reported in the year-ago period.
Net sales of the company rose to Rs 1,222 crore for the June quarter from Rs 1,103 crore a year earlier. According to Managing Director Vinita Bali, the company has registered a 120-basis-point rise in operating margin.
“Last year, we were able to increase operating margins by 80 basis points. Now, in the first quarter of the current financial year itself, it has improved by 120 basis points. We continue to work on three priority areas of revenue management, cost management and innovation to improve the operational performance across the categories,” she said.
Bali also said Britannia, GoAir and all other Wadia Group companies would have to pay up to 0.1 per cent of net sales for royalty and up to 0.25 per cent for shared services to the parent company from the current financial year onwards.
“All the group companies will pay the royalty to use the name of the parent company... There is a certain reputation that comes from the Wadia Group. For example, in this year’s annual report, it is written, Britannia Industries is a Wadia enterprise. This is similar to what Tata or Aditya Birla groups do,” Bali said.
The group has a presence across sectors in different entities, including food (Britannia), garments and furnishings (Bombay Dyeing and Manufacturing Co. Ltd), plantations (Bombay Burmah Trading Corp. Ltd), chemicals (Citurgia Biochemicals Ltd and National Peroxide Ltd), realty (Bombay Realty) and aviation (GoAir).
“There are several shared services like taxation, treasury and legal. It is a recognition of a large number of services that each of the group companies are getting. We are formalising the agreement so that it is transparent. Basically, those services that cut across all companies can be centralised, “ Bali added.
An agreement called, ‘Wadia Brand Equity and Business Promotion and Shared Services Scheme’ has been formulated to this effect.
Meanwhile, the company said it was planning to set up a unit in Gujarat at an investment of Rs 45-50 crore by the end of the year.
“Capacity has been added in several existing manufacturing units and two units in Bihar and Odisha, which were commissioned by the end of last year. We are planning another such unit in Gujarat, which should come up this year-end,” Bali said on the sidelines of the company’s annual general meeting.