Two months after it indicated that it would have to lay off people due to slowing growth and falling demand for entry-level biscuits, Parle Biscuits — a part of the Parle Products group — reported 15.2 per cent year-on-year (YoY) growth in net profit for financial year 2018-19 (FY19).
According to business platform Tofler, Parle Biscuits' FY19 net profit was Rs 410 crore versus Rs 355 crore reported the previous year. Total revenue grew 6.4 per cent YoY to Rs 9,030 crore, with revenue from operations alone growing nearly 6 per cent to Rs 8,780 crore from the previous year. Other income jumped 26 per cent to Rs 250 crore in FY19, aiding top line growth, the Business Standard reported.
In August, Parle — along with other biscuit makers — had sought a cut on the Goods and Services Tax (GST), adding that it would be forced to lay off 10,000 workers. Mayank Shah, category head at Parle, said in an interview that demand for popular Parle biscuit brands such as Parle-G had been worsening since India rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as 5 rupees, or 7 cents a pack.
The higher taxes have forced Parle to offer fewer biscuits in each pack, hitting demand from lower-income consumers in rural India, which contributes more than half of Parle's revenue and where two-thirds of Indians live. "Consumers here are extremely price-sensitive. They're extremely conscious of how many biscuits they are getting for a particular price," Shah had said.
Reacting to the growth in profit, BJP leader Amit Malviya took a dig at “enlightened economists”. “Remember just a few days ago, ‘enlightened Economists’ were telling us how people were not able to afford even small packs of Parle G? Well, Parle Biscuits net profit has risen by 15% in FY19; revenue is up 6.4% to Rs 9,030 crore,” he tweeted.