Britannia Industries Ltd
NSE:BRITANNIA
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Britannia Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Britannia Industries Ltd. Q3 FY '19 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Piyush Bhandari, Investor Relations team. Thank you, and over to you, sir.
Thanks, Aruna. Hello, everyone. This is Piyush from the Investor Relations team. I welcome you all to the Britannia earnings call to discuss the Q3 FY '19 financial results.Joining us today on the earnings call is our Managing Director, Mr. Varun Berry; CFO, Mr. N. Venkataraman; VP, Sales, Mr. Gunjan Shah; VP Procurement, Mr. Manoj Balgi; VP, R&D and Quality, Mr. Sudhir Nema; VP, Dairy business, Mr. Venkat Shankar; VP, Assistant Bakery, Mr. Jayant Kapre; and VP, HR, Mr. Ritesh Rana. We will start the call with remarks on performance by Mr. Varun Berry. Subsequently, we will open up the call for questions. Before I pass it on to Mr. Varun Berry, I would like to remind you that anything which we say that refers to our outlook for the future is a forward-looking statement, which was to be read in conjunction with the risks and uncertainties that the company could face in the form of general economic conditions, commodities and currency fluctuations, competitive product and pricing pressures, industrial relations and regulatory developments.I would now like to pass it on to Mr. Varun Berry for his comments.
Good afternoon, everyone, and welcome to the call. So let me start by getting to the presentation. So let's go to Page 3. What we really are motivated by is the consistency that we've had in our performance over the years and over the quarters. So as a team, we feel very good about that, and that's pretty evident from Page 4. If you look at it, our CAGR on the top line is 11%, and CAGR on the bottom line is 31%, over these years, right from to '12-'13 to '17-'18. Now getting to the strategic plans. All of you have seen this, but just to repeat, heightened innovation, new categories, dairy and international, distribution momentum and cost efficiency programs are the plans which drive our profitable growth. And obviously, the underlying factor is our nimble, homegrown, stable team and our credo of Britannia for Britannians.Moving on to the next page. As far as innovation this quarter was concerned, we launched the Whole Wheat Marie. We also did Good Day Cashew Almond from -- these were new launches. And from an innovation standpoint, we relaunched 50-50, which is giving us great momentum. So I must tell you that our innovation plans are getting us lot more revenue than we've seen in the past. So the innovation agenda has accelerated from a Britannia perspective. We also bridged portfolio gaps in cake, which is on Page 7. And you will see the new cake formats that we've launched. So we've launched Layer Cakes. We've got Swiss Rolls. And we've also launched the chocolate brownie. This is very, very new, so we are in the process of distributing it, so it might not be as widespread as we would want it to be. But in the next month or so, you will start to see it in your neighborhood shop. And again, the underlying factor here is organoleptic superiority, attractive packaging, I do think that this whole cake family is truly looking like a family now. Earlier, we used to have different products looking very different. But today, I'm very proud to say that it's looking very nice, and it looks like a family, and this too at affordable price points, and we've also got shelf-ready packs, which give us tremendous visibility on the shelves of the stores. Moving on to the next page. We've got 2 new categories, one of which is in the market, and the other one is soon to be launched. So these are under the Treat brand, and we've launched wafers, which were launched in South of India as well as in modern trade and now we are slowly scaling this up in the West, and then as we go to North and East as well. And the Croissant, which, frankly, is my favorite product. It's been a little delayed because the commercialization of the line has taken a little bit more than we thought, but we are almost at the end of the journey, and we will be soon in the market. So next month, we should be in the market with this product as well, which will make Treat a mega brand which travels not just many formats of bakery products but many categories as well.Moving on to the next page, which is on dairy and international business. As far as dairy is concerned, our cheese portfolio has started to do very well, but the highlight really is the WINKIN’ COW product, which is the milkshakes that we launched about 6 to 7 months back, which have got tremendous velocity. And as we get into the season for soft drinks and drinks, this is going to see a huge uplift. So we're really very happy with the performance of WINKIN’ COW.As far as International is concerned, we are -- while the trends in the Middle East are not great, from a economic growth standpoint, every company seems to be getting stymied as far as Middle East growths are concerned, but we've seen a double-digit growth in the Middle East, and we just about commercialized our line in Nepal, which should be ready for commercial production in another 30 days or so.Moving on to the next page, which is about distribution. Our distribution agenda continues to generate pace, so now we are available directly in 20.8 million outlets, and this is -- sorry, 20.8 lakh outlets -- 2.08 million outlets, which is 2.5 -- almost 3x what we used to do. So very happy with that number and the way the progress is on distribution. As far as rural is concerned, we've got almost 18,000 distributors, and we continue to clock very solid double-digit growth in the rural markets. The Hindi belt continues to grow faster than our overall growth for the company. So Rajasthan, YTD, we've seen a 25% growth. In Madhya Pradesh, 21.3%. UP, which is the delight, is now at 19%; and Gujarat is at 17%. So we have seen very good growths in the Hindi belt, which is earlier weak. Moving on to the next page, which is the cost efficiency program. These numbers on top of the bars are indexed to the savings that we had in the year '13-'14. So we continue to be at 4.5x of what we did in '13-'14, and it's approximately INR 225 crores to INR 230 crores of savings that we will get to the bottom line this year.Page 12, which shows our Food Park in Ranjangaon. We have commercialized 2 cake lines and 2 biscuit lines. And as we speak, we are building more lines there as well. As I've said in the past, it's a 150-acre plot with a lot of room for us to expand, and this is really looking good. The plant is looking good. We are also in the process of commercializing our Croissant line, which should be done in the next 15 to 20 days. Page 13, it's about our strategy to be a Global Total Foods Company, and we have an organization structure which supports that. So we've got the VP sales and marketing, Ali and Gunjan. We've got VP, Bakery, Adjacency, Jayant, who has 4 general managers under him, 1 handling the Chipita product, the second, bread; third, cake and rusk; and fourth, the new categories that we want to get into. We've got a VP, dairy business, which is Venkat. And our VP, International business, which is Annu Gupta; And then we've got the entire slew of enabling functions with stable and very, very good leadership in each one of those functions.Moving on to the Britannia nutrition foundation. We just added this so that we are able to tell you on what we are doing as far as our CSR is concerned, and I will hand over to Sudhir Nema, who is our VP, R&D, to take you through this.
Right. Thank you, Varun. Good afternoon, everyone. Under this Britannia Nutrition Foundation, they will be focusing on 2 big areas. First one is about the health care program, wherein we have been working on upgrading and renovating Bai Jerbai Wadia Hospital for Children in Mumbai. There, we've installed the CT scanner, which is helping almost about 1,000 patients every year. We have completed almost 65 camps in Palghar, which is highly malnourished district in Maharastra which has benefited about 5,000 children and about 2,500 pregnant women; and installed about 12 ventilators, which is benefiting about 400 children annually.Moving on to the malnutrition. They are 2 again big focus areas. One is to basically address the prevalence of anemia. And second thing is about the management. So for anemia, we've been working in 4 states and having the 4 different programs, which I'll talk about in the next slide, which is Slide 17. So far, the programs for anemia, which is benefiting about 60,000 children now. In Karnataka, we have been working in Uttara Karnataka districts, which is the -- the program has been going on for last 1.5 years. Here, about 43 (sic) [ 43,000 ] children are getting benefited with the program in 11 blocks, and this is the program which we are running through the anganwadi centers. In Rajasthan, we just started the program about 2 months back, wherein we are working with 49 government schools in 2 blocks, which is benefiting 13,000 adolescents in these schools. Similarly, we are working in Chhindwara as well as in Rikhia in Jharkhand. So these are the programs which are aimed to really reduce the prevalence of anemia. At the same time, we have been working on the product options which can reduce these severely acute malnourished children's status. This is a big issue. And on this, we have just recently got the product development done. We are working with UNICEF to get the approval for the product so that we can become the global partner with UNICEF on this product. Now just for the next one, I'll just hand over to Ritesh Rana, who is our VP, HR.
Hi. I would be talking about people philosophy. Varun in his presentation talked about team being nimble and Britannia for Britannians being one of the key levers of our success. We have now relooked at our people philosophy and redrafted the same in line with our corporate brand, exciting goodness. So we looked at something which was unique to Britannia as well as represented excitement and goodness that we provide in our organization. And that's where we have looked at our people philosophy as make things happen. This is built on 4 pillars of inviting, creating, igniting and doing the right thing. Largely trying to answer what would Britannia provide to Britannians, what will be looked forward in Britannians while doing all the right things. So this is the new philosophy that we have recently developed, and we'll be rolling out inside the organization to continue to have an organization which will be nimble-footed and will be team-oriented and collaborative.
Okay. So going on to the results, I will ask Venkat to intervene at the right time. But just Page 21, if you were to look at our YTD growth numbers '18-'19 on the right-hand corner of this slide, this year, we are growing at 12% in revenue terms. And if you were to go to the last line on the same slide, you will see that if you were to look at our 24-month growth, it has accelerated from a low of 12% in Q4 of '16-'17 slowly to 25% in this quarter. So this is -- in the last 8 quarters during the best 24-month growth that we've seen.Moving on to the next slide, which is our commodity basket. So our commodity basket sits at about a 4% inflation for this year. The inflation is predominantly in flour. We have seen a 9% inflation in flour, and there is inflation in RPO because of the duty increases. So the duty during this year increased from 30% to 48%, which took the palm oil prices up, so there is a 10% inflation in RPO, while there is a deflation in sugar at about 14%, and there was deflation in all the milk products, which is at 12%, leading to an overall inflation of 4%.Our bottom line performance has been consistent, and the 2 major factors for this -- I'm on Page 23 now, is number one, accelerated cost efficiency program, which we leveraged very well and have run in a very structured way under the leadership of Venkataraman, who is our CFO. And second, we've been leveraging our fixed costs through the years. The next page, we are preempting your questions so that we can answer this. So if you were to look at our overall increase in the expenditure, as you see it in the P&L that you will have in front of you, you will see that our material cost has gone up by 6%, but you got to remember one thing that this -- there is a change of model that we've done in our Bread business. So our bread used to be on a model whereby the contract baker would buy the material and make the product and give it to us. We've now moved that to -- we buy them the material and give it to them. So basically, what happened is that almost 2% of the cost, which was the contract packing cost, while the material cost is still showing in the material cost line, but the contract packing cost was also showing up there, which has now moved to other expenditure. So while 2% has moved from the first line to the fourth line, it's showing as a 7% increase because the number is lower, so that's the shift that happened between material cost and other expenditure. As far as employee cost is concerned, the inflation is at 25% because we've added new units, new plants, et cetera, which are 9% of the cost. The increments were almost -- increments and promotions and additions were at about 13% and others were at about 3%. Depreciation and amortization is high because of the capitalization of the assets relating to our new units in Guwahati, Mundra and Ranjangaon, which leads to overall total operating expense increase of 10.5%. So this is not leveraging really. But when you're building so many new plants and you can keep this number below your top line growth, that is good. So if you were to move to the next slide, which is of consistent profitability, you will see that our total profitability year-to-date this year has grown by 14.4%. So if you were to go down to the bottom line, which is the 24-month growth, it's at 44%. So again, the acceleration in the 24-month growth shows that while this -- we've grown on a high base of last year.So growing at a faster pace than the top line is what we think has been the highlight as far as the profit is concerned. Moving on. So if you were to look at the key financial lines for the consolidated results, our net sales has grown by 11%, profit from operations 12%, profit before tax 17%. And this quarter, we've had a high incidence of tax. And the reason for that is that there was a maintenance in our Middle East factories and a lot of the volume shifted to India, and we've had to pay tax on it, while in the Middle East, there is no tax. So that's why profit after tax is at 14% while profit before tax is at 17%. So again, if you were to look at the key KPIs across the years and the quarters, you will see that our profit from operations is at 14.5%, our profit before tax is at 16.5% and our profit after tax is at 10.6%. I will request Venkat to add anything that he would like to say.
No, I think you have covered most of it. Only one thing to add, a simple point that if you look at -- because some of these questions came up, in terms of increase in costs. So if you look at the total expenditure for the payments -- Page 24, so if you look at total expenditure for this quarter 2 as a percentage of industry, it's 86.2. And if you look at expenditure in quarter 2, it was 86. And in quarter 3 of the previous year also, it was 86.2. So while some of the numbers seem to be showing a slightly higher number, overall, the expenditure has been range-bound between 86 and 86.2.
Okay. Now we can now -- anything else, Venkat? Okay.We can open the house for questions.
[Operator Instructions] The first question is from the line of Sameer Gupta from India Infoline.
This is Percy Panthaki here from IIFL. Sir, if I minus your stand-alone from the consolidated to get a rough approximation of your subsidiary performance, I see that top line has declined Y-o-Y by 11%, and EBITDA has declined Y-o-Y by 77%. Can you just throw some light on what is happening here? Is it dairy or is it International which is pulling down the performance?
So like Varun mentioned, Middle East on account of a maintenance work which is happening there, the revenues have shifted from Middle East entities to India. So effectively the top line of some of these Middle East entities have come into the stand-alone company and therefore the impact.
So there is no underlying issue, our International business is doing well. Dairy is doing extremely well from the top line as well as the bottom line from -- both top line and bottom line. In fact, our dairy and International businesses have been accretive to our overall top line as well as bottom line for this quarter.
Right sir. Understood. Secondly, there was some comment in the press release about a concern on demand environment and the government stimulus probably sort of offsetting those concerns. So just wanted to know the sort of story behind these comments. Why do you say that there is a concern on demand where no other FMCG has called out any such issue. And secondly, do you think that INR 75,000 per year stimulus is really material enough to sort of make any significant impact on your top line?
No, no, I think it's the feel good factor. See -- if you look at -- see we are very tough on ourselves. If we don't meet double-digit volume growth, we feel that we've not done our work. So I think if you look at overall volume growth from most companies' perspective, we are probably the highest if you take a CAGR of 3 years, but we still want every quarter to be at a certain number and that I thought we were a little disappointed that we didn't get to the double-digit number, and we did see actually a slowdown post Diwali. So that's what we were talking about, but we are hopeful that, that will certainly come back. Now I'm not going to comment on INR 75,000 because that's a very political statement. So I'll reserve my comments on that, yes.
Fair enough, sir. Fair enough. Last question, basically, I think Venkat mentioned that over the last 3 years in Q3, the total expenditure has more or less remained unchanged, which means that your EBITDA margin has also more or less remained unchanged. And typically, we have a track record of sort of delivering some modest EBITDA margin expansion. So in light of that, how do you see the next year panning out for you?
So it was not over a period of 3 years that I was talking about. I was comparing Q3 of last year, Q2 of this year and Q3 of this year.
Sorry. My mistake.
It's the last 1 year. Having said that, your point is valid. I think some of the expenses that have come in, in this quarter, we will see the revenue coming through in the coming quarters. So for instance, new category, some of the expenditure have got booked in quarter 3 of this year. The revenues for them have still not come through. So for instance, Croissant, the expenses have already started coming in. So the revenue for them will come through is one element of it. And two, as you can also see, there has been inflation in both material cost, about a 4% inflation in material cost, and there is an inflation in fuel and labor costs. So these, going forward, have to be met out of cost efficiency programs and price increases that will have to happen.
The next question is from the line of Abneesh Roy from Edelweiss.
My first question is on the cake business. I see the pricing of the new cake products being INR 330 to INR 400. Now this kind of pricing is at a premium end of the biscuits. So is the margins also similar to the premium end of the biscuits? So is it margin-accretive in terms of gross margins?
Similar.
So similar to the premium end or slightly lower?
No, similar to the premium end.
But Varun, we have seen that the premium biscuit did not work with the initial expectation. What can be different here? Is it the LUP, which is the difference here versus the premium biscuit?
Sorry. I didn't get -- are you talking about the cake versus the biscuit?
Yes, premium biscuit did not exactly work as per the initial expectation, so why it will...
The premium biscuits, Abneesh, have actually worked. There are a few which didn't work to the expectation. But if you were to look at NutriChoice Oat Cookies, they've done extremely well. Our Chocolush is doing extremely well now. We are delighted to see the kind of momentum that we have post the relaunch. There are a few which, I would say, tepid at this point in time. But you're right. This format, what it brings to the table is the affordability of the pack itself. So a INR 10 pack with a delightful product makes a big difference to the purchasing power et cetera.
Varun, so many new products in cakes and now 2 lines also which has been set up in Ranjangaon for cake. So if x is the size, say, in FY '19, not asking about absolute number, any idea what could this be in a 3-year time horizon? Not asking for a guidance, more from a thought where it can go in 3 years.
So I would say that at least we would like to see the cake growth to be 300 to 400 basis points more than what they would be on the base business.
Okay. And second question is on rusk and on the wafers. So rusk, I didn't see you talking, although it was good innovation, but Parle is also doing similar kind of innovation at a much lower price. So is that the reason you're not talking about?
No. It's not disruptive innovation. We are looking at some disruptive innovation as well as -- as far as rusk is concerned. And when we get to that, we'll talk about that.
Last one on RPO and milk inflation, what is the outlook?
This is the operator, may I request you to please rejoin the queue for further questions.The next question is from the line of Arnab Mitra from Credit Suisse.
My first question was on the input costs, you had I think highlighted last quarter that you had forward covered a lot of inputs at lower prices. So as those forward covers now run out, what is the level of additional inflation which could come in, in the coming quarters? And the various commodities, how are they kind of trending as we speak?
So we are not looking at very different inflation number for the coming year as well. I think, according to our estimates, it will be between 4% to 5%. Now within the categories, there could be a difference. So as we've seen this year, the flour inflation will -- the wheat and flour inflation will continue to be high as far as next year is concerned as well. We could see a slightly higher -- well, actually much higher inflation in milk products as well, but sugar and oil will remain range-bound and lower inflation on both. And similarly on laminates, so in fact, on oil as well as on laminates, we are thinking that there could be a deflation, so -- which would lead to an overall inflation between 4% to 5%.
Okay. And second question was on your -- the Middle East business partially shifting to India this quarter. So if you could help us what is the domestic revenue growth if you would exclude the Middle East component in the India business this quarter.
These businesses are so small that they don't make a big dent on to the domestic business. So 10 basis points, 15 basis points, here or there, so it's not a big deal.
The next question is from the line of Prasad Deshmukh from Bank of America.
So on channel growth, have you seen too much -- I mean, what kind of growth have you seen in modern trade in cash and carry channel in the quarter?
So we've seen very healthy growth in the modern trade channel. The channel where we are seeing a little bit of pressure is the channel, which is not actually a channel, which is wholesale. But otherwise cash and carry and modern trade have been good. So I will ask Gunjan to help you with this, yes.
Actually our growth, as Varun mentioned, also have been led by rural as well as modern retail. Cash and carry, which is the formal wholesale as well as the informal wholesale, which is anywhere there in the current trade market are the ones that have been a little sluggish post Diwali.
So even cash and carry has been sluggish?
Yes.
Second question, on your advertising strategy for the new products that you're launching. Will the TV versus, say, online kind of proportion remain similar for the new products also, considering these are premium in that sense?
No. So that depends on what kind of product you are talking about. But if you are talking about mass consumption, then in today's world, you can't exclude television. But if these are niche products, which are very premium, then you can look at doing digital. So just to give you an example last year -- I'm not talking about '18-'19, I'm talking about '17-'18 and the first half of '18-'19, on Little Hearts, which is a reasonably large brand for us, we were only on digital. Even for our chocolate slab on a biscuit product, we've predominantly been on digital. But most of the other products, which have got mass consumption and have to get to a larger number of outlets and larger number of towns and villages, there you have to have television as an essential part of your vehicle channel, your media vehicle. So that's how we do it. In fact, while our digital spends have gone up, but they still remain at about 9%, 10% of our total spend.
Okay. If I can ask a follow-up, how do you measure effectiveness of digital in that case?
That's something which I will have to sit with you and probably discuss with you.
The next question is from the line of Latika Chopra from JPMorgan.
My first question was, you had a price mix growth of 5% for the domestic business, how do you split this between absolute price growth and the mix contribution?
So this quarter, it was actually 4%. So 2% was price growth, and 2% was mix growth.
And Varun, when you talk about price growth, is it you've scaled back some of the promotions? And/or maybe just trying to assess how would be the growth in number of packs sold versus the volume growth that you report? Is it very similar?
Yes, it will be very similar. It will be maybe 1% or 2% lower.
The next question is from the line of Amnish Aggarwal from Prabhudas Lilladher.
I just have a couple of questions from my side.
Excuse me, this is the operator, Mr. Aggarwal, may we request you to speak closer to the phone. We are unable to hear you.
So my question is on the gross margins, because if you like at on a say stand-alone basis, this quarter, gross margins are 41.1% approximately. You have had this kind of a number say above 40% after a gap of nearly 3 years. So looking at the fact that you're guiding to 4% to 5% kind of an inflation even in the coming years, so how confident are you this 41.1% or -- above 40% gross margins will be sustainable? Or is it like your one-off kind of a number?
So Varun explained that because of a business model change, we had some of the expenses going away from this line and getting into other expenditure. So that is one reason for that. The second is also about shift in the export business from Middle East to India. So these are 2 reasons as to why you will see a slightly distorted number. So it should come back to the normal levels.
Normal level of, say, 39-odd percent?
Yes.
But sir, EBITDA margin also, if you look at 16.5% this quarter, EBITDA margin has also been higher than what we have seen. So will it also be coming back to the normal, say, 15, 15.5 range?
So it's very difficult to give this answer across, but fundamentally our objective always is to take our top line and bottom line higher than what it is. Yes, so once we are done with our annual plan, which should be in the next month or so, we know exactly where we are going, but there doesn't seem to be any disruption in anything. It seems like inflation is going to be business as usual. And hence, the predominant focus is going to remain on the plans that I spoke about.
Okay. So it's like everyone should consider them as more like one-off as of now?
You can consider.
Sir, my second question is on the new launches where you have now your Vita Marie Gold wheat variant, then a Good Day variant is there, then impressive line of cakes is there. So what sort of, say, delta in your growth you are expecting from there. In the past, say, if you look at the launches made in the last couple of years? So how much incremental have you contributed to -- they have contributed to growth? And based upon the lineup which you're having, do you think that the growth rate will considerably accelerate from here?
So we always look at our innovations contributing between 3.5% to 4.5% of our revenues. We calculate innovation based on the last 24 months, anything launched in the last 24 months. And it has to be new. We do not take brand extensions or just new variant to be a disruptive innovation. So yes, we are looking at the kind of innovations that we've done this year. We are hoping that we will be able to get probably more than that next year.
Okay, sir. Just finally, what sort of -- are you looking at any price increase shortly, looking at 4%, 5% inflation outlook which you're giving?
Yes, we will have to take a price increase, which will be anywhere from 3% to 4%.
Okay. Is it likely in the near term? Or slightly back-ended?
Yes -- sorry, let's give some other people also a chance.
The next question is from the line of Tejash Shah from Spark Capital.
Yes. Just one question on new NPD pipeline. So the -- if we do a sum total of all the categories that we are participating, be it adjacencies on your categories like dairy, how much -- what will be the rough estimate on the addressable market size that we can cater to or what we are catering to?
So the categories that we are looking at are -- some of them are small categories like, for example, wafers is not a very large category, probably INR 400 crores, INR 350 crores to INR 400 crores maybe. And Croissant is a very, very new category. It's got hardly any base. But obviously, we want to grow that into a very large category. Dairy drinks is a large category, and we hope to get -- there, we are looking at share rather than developing the category. Similarly, cakes is an existing category, but a small category. And being the market leader, the objective will be to grow this category. And hence, that's what we are looking at. So this is, I would say, it's got to be a strategy which depends on which category we are going into and what we want to do with that, so it's not a fresh strategy for across our portfolio.
And sir, when we go about this NPD pipeline, do we segregate between whether we'll have to play a role of developing the category? Or we'll be snatching market share from existing players? And accordingly, the whole A&P spend or requirement to build the category will be different. So just wanted to understand the approach on the same.
That's what I told you, but it will be -- in certain categories it will be to develop the category, and on certain categories it will be to take share from other players. And yes, the approach will be different in both because developing a category will probably take a little more effort than taking share from a category where if our products are good and we've got the distribution and we have the right advertising, we should be able to do that with slightly leveraged spend. Is it okay?
[Operator Instructions] The next question is a follow-up from the line of Abneesh Roy from Edelweiss.
Sir, Nepal, you have done well, so now we are close to the next franchise you're starting. So have you identified the next country? You had earlier identified 5, 6, but have you drilled down to the final one?
Yes, we have, Abneesh. We are not in a place to tell you about that, but we are working on 2 or 3 countries, and we are close to doing one. So hopefully, in the next couple of months, we should be able to close that.
And in cheese you have taken sharp price cuts, which you had earlier highlighted, and my sense is that has worked. But you also said, this time, the dairy business sales are also good and profits also good. So how come both have happened? I understand, yes, the dairy prices are soft, but the competition hasn't cut to the same level.
Well, it's not a price cut really. These are promotions that we are doing on our products. And while you can call it a price cut, if you want, but the fact is that the dairy -- we've taken advantage of the dairy -- the milk prices in the market. And as a result of that, we are seeing both top line and bottom line growing.
[Operator Instructions]
All right. Hello?
Yes, sir, there are no questions.
Okay. Good, good, good. So we are clear.
Mr. Piyush Bhandari, over to you for closing comments.
Yes. Thanks, everyone, for spending time with us on this call. We look forward to interacting with you again. Thank you.
Thank you very much, sir. Ladies and gentlemen, on behalf of Britannia Industries Ltd., that concludes this conference call. Thank you for calling us, and you may now disconnect your lines.