Brands
Q1-2016: Britannia Industries ad and sales promo spends up 16%
BENGALURU: Britannia Industries Limited (Britannia) spent 16 per cent more towards Advertisement and Sales Promotion (ASP) in Q1-2016 (quarter ended 30 June, 2015) at Rs 160.52 crore (eight per cent of Net total Income from Operations or TIO) versus Rs 138.43 crore (7.7 per cent of TIO) inQ1-2015, butspent 20.9 per cent lower than the company’s ASP in Q4-2015 at Rs 202.89 crore (9.8 per cent of TIO). Please refer to Fig 1 below.
Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore
Company speak
Britannia managing director Varun Berry said,”Our results are a reflection of our focus on driving consumer off-take and operational efficiencies to generate sustainable and profitable growth, despite the slowdown that is being witnessed in the FMCG sector. We have passed off the benefits of benign commodity prices and made our brands more affordable to the consumers. We continued our efforts to expand our distribution footprint and ensure efficiency in operations through reduction in wastages and tight management of fixed costs. We move ahead on our innovation journey with the launch of ‘Pure Magic Chocolush’ during the quarter.”
TIO and Ad & Sales Promotion spends
In Q1-2015, Britannia’s TIO increased 13 per cent to Rs 2018.60 crore as compared to the 1786.99 crore inQ1-2015, but declined 2.2 per cent as compared to the Rs 2063.64 crore in the immediate trailing quarter. TIO in the previous quarter (Q4-2015) was the highest during a 13 quarter period starting Q1-2013 until the current quarter. The broken grey trend line indicates that the company’s TIO has a linear increasing trend during the period under consideration.
Also, during the period under consideration in this report, Britannia’s ASP in Q4-2015 was the highest, both in terms of absolute rupees as well as in terms of percentage of TIO. The lowest ASP in absolute rupees was in Q1-2013 at Rs 112.96 crore (8.3 per cent of TIO), while in terms of percentage of TIO, it was 7.3 per cent (Rs 143.48 crore) in Q2-2015. The maroon broken line shows a slight decline in ASP in terms of percentage of TIO, while the blue broken trend line indicates a linear increasing trend for ASP in absolute rupees.
Please refer to Fig 2 below. In Q1-2016, Britannia reported PAT of Rs 189.58 crore (9.4 per cent of TIO), which was 66.8 per cent more than the Rs 113.66 crore (6.4 per cent of TIO) in Q1-2015 and was 38.2 per cent more than the Rs 167.25 crore (8.1 per cent of TIO) in Q4-2015. During the period under consideration in this report, the company’s PAT shows a linear increasing trend both in absolute rupees as was well as in terms of percentage of TIO.
During the thirteen quarter period under consideration, PAT in Q2-2015 was the highest recorded by the company, both in terms of absolute rupees as well as in terms of PAT as percentage of TIO at Rs 270.46 crore and 13.7 per cent of TIO respectively.The lowest PAT reported by the company in absolute rupees as well as in terms of percentage of TIO was in Q1-2013 at Rs 46.48 crore and 3.4per cent of TIO during the same period.
“We remain committed to tap new sources of growth and focus on commercializing consumption opportunites across our product portfolio. We are confident that our team of passionate and motivated Britannians shall take the business to greater heights,” added Berry.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
