Rising input and operating costs eroded profitability at two of India’s leading packaged food companies—Mondelez India and Parle Biscuits—in FY25, even as consumer demand remained largely resilient.
Mondelez India, which owns marquee brands such as Cadbury, Oreo and Bournvita, reported a dramatic collapse in net profit to just ₹11 crore in FY25, compared with ₹2,021 crore in the previous financial year, according to financial data accessed through business intelligence platform Tofler. The company’s revenue declined 9% year-on-year to ₹12,602 crore.
Sales slipped 1.9% to ₹12,503 crore from ₹12,747 crore in FY24, while total expenses surged to ₹12,549 crore from ₹11,082.4 crore a year earlier. The sharp rise in costs—driven by soaring prices of cocoa and dairy inputs, higher employee expenses, increased depreciation and a spike in interest costs—severely compressed margins. The jump in interest expenses reflected higher borrowings amid tighter financial conditions.
Parle Biscuits, India’s largest biscuit maker by volumes, also reported a steep decline in profitability despite posting revenue growth. The company’s net profit fell 39% year-on-year to ₹980 crore in FY25, even as revenue rose 7% to ₹16,191 crore. Operational sales increased to ₹15,568.5 crore from ₹14,349.4 crore in FY24.
Parle’s margins were hit by elevated prices of key raw materials such as wheat, sugar and edible oil, along with higher packaging, fuel and logistics costs. Unlike premium food companies, Parle operates largely in a highly price-sensitive mass market, limiting its ability to pass on cost increases to consumers without risking volumes. As a result, higher sales did not translate into stronger bottom-line performance.
The results underline the mounting pressure on FMCG companies as volatile commodity prices and rising operating expenses continue to test profitability, even as demand for packaged foods holds steady across urban and rural markets.