Earnings Outlook
Price hikes, sales volume to boost Britannia PAT, revenue
This story was originally published at 14:44 IST on 4 August 2025
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By Avishek Rakshit
KOLKATA – Britannia Industries Ltd. is expected to see a boost in revenue and profit for the June quarter, driven by a 3.0–4.5% increase in sales volume along with price hikes. However, persistent cost pressures may limit any improvement in the company's margins.
The biscuits and packaged foods major is expected to report a 13.5% on-year growth in its consolidated net profit for the June quarter to INR 5.7 billion and consolidated revenue is projected to grow 8.5% on year to INR 46.1 billion, according to the average of estimates from 13 brokerages. From the trailing quarter, the net profit is likely to increase 2.5% and revenue expected to rise by a little over 4%. Britannia is scheduled to announce its June quarter earnings Tuesday.
JM Financial Institutional Securities Pvt. Ltd. sees Britannia's net profit and revenue the lowest at INR 5.5 billion and INR 45 billion, respectively. InCred Research Services Pvt. Ltd. has the highest estimates for profit at INR 6 billion and Nomura Equity Research has the highest estimate for revenue at INR 46.9 billion.
Britannia had reported a net profit of INR 5.1 billion in the year-ago quarter and its net profit for the March quarter was INR 5.6 billion. The company had clocked a revenue of INR 42.5 billion in the year-ago quarter and INR 44.3 billion in the March quarter.
All the brokerages are of the view that Britannia's revenue will grow on account of higher prices and volumes. Kotak Institutional Equities, which modelled a 4% on-year volume growth in the company's core portfolio of biscuits, said a 6% price rise during the June quarter will boost the company's top line. Brokerages noted the company's sales volume will increase during the June quarter despite price hikes.
In the consumer goods industry, price hikes typically lead to a dip in volume growth, as consumers often reduce purchases or switch to alternatives. This trend is particularly evident in the bakery segment, where shoppers tend to turn to local brands or competitors when larger companies raise prices. Despite Britannia's strong market presence in India's biscuit space, it faces substantial competition from Parle Products Pvt. Ltd., ITC Ltd.'s foods division, and several regional companies like Saj Food Products Pvt. Ltd.
For the past five quarters, Britannia has focussed on gaining market share in the highly competitive baked products industry. The company views market share as the prime pillar for its future growth, as an expanded presence will help them diversify sales channels into selling adjacent products and other food products that it produces.
However, in the June quarter, owing to continued inflation in key raw materials such as wheat, palm oil, milk, cocoa, and others, the company raised prices to make up for the surge in costs. The company had hiked prices marginally for some of its products to stave off higher raw material prices in the March quarter as well.
Brokerages said Britannia's endeavour to gain market share by firmly establishing its sales channels and increasing presence and its product portfolio helped the company register volume growth despite increasing prices. Its competitors, including regional players, had also raised prices, albeit by varying degrees. Motilal Oswal Financial Services Ltd. credited the company's focus on innovation and distribution channels as the driving forces behind its volume growth and market share gains. Despite the projection of a good profit growth, brokerages are bearish on Britannia's margins due to high raw material prices.
Kotak Equities estimates Britannia's consolidated gross margin to contract by 205 basis points on year. Motilal Oswal expects the gross profit margin to fall by 260 basis points on year to 40.8% on account of higher raw material prices. Although Britannia had raised prices in the past 3-4 quarters, it did not pass on the entire cost increase to consumers to maintain volume growth that eventually translated into higher market share.
While maintaining that the company's margins will be under pressure in the reporting quarter due to high-priced raw material inventory, Nomura estimated a 6% on-year increase in Britannia's earnings before interest, tax, depreciation, and amortisation growth. Nuvama Wealth Management Ltd. said the company's EBITDA will jump 12.3% on year.
Britannia is expected to report EBITDA of INR 8.2 billion, according to the average of estimates from 13 brokerages. Nuvama projected the EBITDA to be the highest at INR 8.4 billion while Motilal Oswal estimated it the lowest at INR 7.9 billion.
At 1324 IST, shares of Britannia traded 0.8% higher at INR 5,767 on the National Stock Exchange. The stock price has gone up 6.5% since the company announced its March quarter earnings in May.
Of the 20 research reports on the company available with Informist, 13 have a 'buy' rating on the stock at an average target price of INR 5,185. Five brokerages have a 'hold' rating on the scrip at a target price of INR 5,768 and two have a 'sell' rating.
Following are the Apr-Jun earnings estimates for Britannia Industries based on reports from 13 brokerages in descending order of the estimate of net profit:
Broker Name | Net sales (in million rupees) | Net profit (in million rupees) | EBITDA (in million rupees) |
InCred Research Services Pvt Ltd | 46,076.00 | 5,999.00 | 8,333.00 |
YES Securities (India) Ltd | 46,681.00 | 5,899.00 | 8,403.00 |
Nuvama Wealth Management Ltd | 46,223.00 | 5,890.00 | 8,462.00 |
Emkay Global Financial Services Ltd | 46,503.00 | 5,821.00 | 8,316.00 |
Prabhudas Lilladher Pvt Ltd | 46,328.00 | 5,814.00 | 8,339.00 |
Systematix Shares and Stocks (India) Ltd | 45,092.00 | 5,784.00 | 8,276.00 |
Kotak Institutional Equities | 46,283.00 | 5,783.00 | 8,344.00 |
Dolat Capital Market Pvt Ltd | 46,156.00 | 5,723.00 | 8,419.00 |
Elara Securities (India) Pvt Ltd | 46,621.00 | 5,702.00 | 8,155.00 |
Nomura Equity Research | 46,901.00 | 5,569.00 | 7,982.00 |
Nirmal Bang Equities Pvt Ltd | 45,691.00 | 5,564.00 | 7,950.00 |
Motilal Oswal Financial Services Ltd | 45,833.00 | 5,532.00 | 7,929.00 |
JM Financial Institutional Securities Pvt Ltd | 45,016.00 | 5,529.00 | 7,996.00 |
Average | 46,108.00 | 5,739.15 | 8,223.38 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Subhojit Sarkar
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