New Delhi: McCain India, a company that makes snacks like frozen French fries and potato tikki, has reported a 29 per cent decline in profit in FY24. This is due to an increase in advertising costs and management fees.
According to the financial statements submitted to the Registrar of Companies, the company had a total profit of Rs 89 crore in FY24, which was Rs 126 crore in the previous financial year. However, there has been a marginal increase in the company’s income. This decline in the company’s profit has come at a time when advertising expenses have increased by a massive 63 per cent to Rs 88 crore. Management fees and other operating costs have also seen an increase, which has affected the company’s margins.
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The company’s total expenses have increased to Rs 1,125 crore in FY24 from Rs 1,020 crore in FY23. Material purchases remained the largest cost component for McCain India in FY24, accounting for about 44 per cent of total expenses or Rs 493 crore. Employee costs also increased by 19 per cent, while additional expenditure on fuel, freight, storage and contract labour has increased the company’s costs.
Despite these challenges, the company’s income saw a growth of 3 per cent. Income from operations has increased from Rs 1,172 crore in FY23 to Rs 1,214 crore in FY24. Combining interest on deposits and income from other sources, the company’s total income in FY24 stood at Rs 1,245 crore, up from Rs 1,189 crore in the previous fiscal.
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McCain, which entered the Indian market in 1998, has become a major player in the frozen snacks segment. The company sells its products through retail stores, restaurants and quick commerce platforms such as Blinkit, Swiggy Instamart and Zepto.
According to reports, the fried snacks market in India remains strong, with long-term success for McCain depending on expanding its reach to smaller towns and improving its cold chain logistics infrastructure.
According to reports, even with a ROCE of 15.28 per cent and an EBITDA margin of 4.58 per cent, the drop in profits in FY24 indicates that the company should better manage rising costs.
