Prataap Snacks saw a good recovery in the first quarter on the back of a low base. The firm’s revenue was up at Rs 279.62 crore versus Rs 195.69 crore for the same period last fiscal.

However, gross margins took a hit due to an increase in palm oil prices. They came in at 24 percent compared 28.2 percent in the corresponding quarter last year. The company has reported a loss in the current quarter of about one and a half crore.

CNBC-TV18 spoke with Amit Kumat, MD and CEO, Prataap Snacks to discuss the quarterly performance and the outlook going forward.

Talking about recovery, Kumat said, “We have delivered a robust performance despite the severed second wave of the pandemic in India, the learnings of the past year had made us better prepared to save the disruptions and our team responded with the agility to overcome challenges and restrictions to ensure uninterrupted supplies to trade channels. This has helped us to post revenue of Rs 279 crore, which is higher by 43% on year on year basis.”

He added that though schools and institutions are not yet fully open, Prataap Snacks, which offers a variety of snacks under the Yellow Diamond brand, improved the performance with a heightened focus on initiatives in smaller cities and towns and alternate distribution strategies.

With the economy regaining momentum and trains services supposed to resume in a phased manner, Kumat said the company expects a further uptick in demand. He, however, pointed to concerns regarding the increase in the cost of raw materials, especially palm oil. “We're experiencing unprecedented inflation,” he said.

Kumat said the palm oil prices are “astronomically” high and that the average price of the oil is almost 65 percent higher than the first quarter. He added that the company is undertaking various initiatives for cost rationalisation and process improvements.

When asked if the company would look at increasing prices, he said, “There is no price increase in our case, because the Rs 5 remains a Rs 5 product, we just have to reduce the weight. But that has been the last resort for us. We are trying to improve.”

For the entire interview, watch the video

(Edited by : Kanishka Sarkar)

First Published:Aug 4, 2021 4:19 PM IST