Demand recovery to be a gradual process, unlikely to be a sharp "hockey stick": Britannia's Varun Berry

Britannia managing director and vice chairman Varun Berry said the demand recovery is unlikely to be a sharp "hockey stick" one but a gradual process which will continue till next year. He said the process has already started.

Talking to analysts during the company's earnings call on Monday, Berry said this year should be a "test" of both revenue and volume growth.

"So, we are hoping that we will be able to grow revenue and volumes. Obviously, there will be a delta because we have taken a pretty high price increase in the last quarter and we will be necessitated to take slightly more price increases to make sure that we deal with the inflation which comes in. But having said that, we are hoping to see healthy growth, both volume as well as revenue," he said.

Senior executives of Hindustan Unilever, Tata Consumer Products and Marico Ltd have mentioned in recent earnings calls that demand recovery will take some time due to persistent inflation but is definitely expected.

For Britannia, the volume growth has been reasonably good as compared to revenue growth even in the last two years, Berry said. He, however, said there may not be the need for any more price increases with some remnants of the price increase which move into the two months of this quarter.

"But, that will all depend on how the trends (commodity price) move through the quarter and we will have to take a call based on those trends," he said.

Berry was appointed as the interim CEO, effective May 8th, after erstwhile CEO Rajneet Kohli’s exit. He said the succession planning is being worked out. “It's a statutory requirement that a position of CEO has to be filled, so that's where it is, but the succession planning is in play, and it will definitely be clear to you in the next 3-4 months..I can't comment more than that right now,” he said.

Manoj Balgi, chief manufacturing and procurement officer at Britannia, said wheat prices have been higher than last year despite a higher yield due to 7% higher minimum support price offered by the government.

"From outlook perspective, we obviously are very closely monitoring which way the commodity prices move, we are going through the phase when the new season wheat comes in and we are not very clear at this stage whether the inflation is going to be as far as wheat is concerned but we are closely monitoring that," said Berry.