New Delhi, Aug 9 (IANS): Britannia Industries on Friday reported a 3.65 per cent decline in profit for the first quarter ending June at Rs 248.64 crore. down from Rs 258.08 crore on this account in the comparable period last year.

One of the largest dairy product manufacturer, Britannia said that "the inordinate increase in milk prices impacted profitability of our dairy business adversely".

India Inc, especially the fast moving consumer goods (FMCG) sector and auto makers, have witnessed a sharp drop in profits in the first quarter owing to the marked slowdown in economic activity.

The company's total income during the June quarter stood at Rs 2,767.8 crore, up 7.03 per cent, as against Rs 2,585.84 crore in the similar period last year, the company said in a regulatory filing.

Describing the current quarter as the "phase of sluggish demand,", the company said that "on the cost front, we witnessed moderate inflation in the prices of key raw materials for the bakery business."

The Britannia Industries stock in afternoon trade on the BSE was trading 0.75 per cent higher at Rs 2,598.15 a share.