Choco Bites

Cadbury's topline has been hit as a result of the slowdown, though lower cocoa prices have helped it post decent earnings growth

Cadbury India (CIL) is the latest to have been hit by the slowdown in the economy with sales growing at a slower than usual 11.9 per cent. The management has admitted that demand for their products have been affected despite the company's relatively low exposure to rural areas.

However, the full benefit from lower cocoa prices during the quarter saw its operating margins jump by more than 300 basis points to 17.55 per cent. Most other expenses grew at higher rates and notably among these advertising expenses jumped to over 12 per cent of sales. In fact, assuming proportionately similar raw material costs as in the previous year, CIL's OPM would actually have witnessed a contraction.

The slowdown in topline growth in this quarter apart, some analysts have started pointing out other concerns about the company. Take for instance, the faring of its sugar confectionery brand, Frutus, which the management admits hasn't done well. While the company has reiterated that all of its other brands are in good shape, analysts feel that certain brands such as "Bournvita" are not doing well vis-