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Informist, Wednesday, Aug. 6, 2025

 

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--Britannia: Registered high single digit growth in urban mkts in Q1
--CONTEXT: Comments by Britannia's mgmt in post-earnings analyst concall
--Britannia: Registered double digit growth in rural mkts in Q1
--Britannia: E-commerce doing well with 4% share in overall business
--Britannia: Mkt shr rose by 65 bps in Q1 in four Hindi speaking states
--Britannia: Do not see much fluctuation on commodity prices going ahead
--Britannia: Done with price increases to make up for increased input costs
--Britannia: Appointing mega distributors across India for channel restructuring
--Britannia: See volume growth coming back steadily in coming quarters
--Britannia: Made war chest to up business in some areas against some rivals
--Britannia: Some benefits of lower palm oil import duty came in Q1
--Britannia: May cut prices in some areas to stay more competitive
--Britannia: Reassessing strategy in cakes for revenue, volume, margin growth

 

By Avishek Rakshit & Afra Abubacker

 

KOLKATA/Mumbai – After losing market share in east India during Apr-Jun despite increasing the same in four Hindi-language-speaking states, Britannia Industries Ltd. may cut prices in certain regions to stay competitive and bag market share from regional players, a top company official said in a post-earnings conference call. The company is also doing region-specific analysis against specific competitors to gain market share in targeted markets, he added.

 

"If there's any need to be competitive in certain territories, we will make sure that we do," the company's Vice-Chairman, Managing Director, and Chief Executive Officer, Varun Berry, told sector analysts Wednesday in a post-earnings conference call.

 

Berry said that during the June quarter, Britannia gained market share by 65 basis points in the four Hindi-language-speaking states which the company terms as 'Hindi belt'. However, it lost market share in east India where regional players are predominantly strong and Britannia undertook its sales channel restructuring aiming to increase sales. This market share loss offset the gains from the 'Hindi belt' and led Britannia to report flat market share in the June quarter. Over the past five-six quarters, the company has been focussing on increasing its market share across the country.

 

"We've also been able to create a war chest for ourselves to be able to spend in specific territory, specific states against specific players. So, we are going to fight many battles in smaller territories, and we are doing specific analysis on each one of these competitors", Berry said.

 

The company's plan to gain a competitive edge in specific regions follows Britannia raising prices across the country in a phased manner over the past four quarters to make up for increased raw material prices. However, with the projection of stabilising input costs, the company is optimistic about stability in cost pressures and operations.

 

Britannia has maintained that cost pressures arising from higher commodity costs hit regional players harder than companies having presence nationally. In fact, when commodity costs like palm oil, cocoa, flour and sugar rose, Britannia was able to gain market share at the cost of regional competition despite raising prices. Usually, any company loses market share once it resorts to price increases.

 

During the June quarter, when Britannia posted a price-led revenue growth of 8.8% on year to INR 46.2 billion, it registered high single-digit growth in urban markets and double-digit growth in rural markets, prompting Berry to comment that there was a marginal uptick in consumption during the June quarter. The company also benefitted from the duty reduction in palm oil in the June quarter and is expected to reap further benefits of easing palm oil costs in the coming quarters as well. Britannia is currently not considering further price hikes to stave off higher input costs.

 

"Volume will also come back slowly and steadily, but I would say the delta (difference) between volume and revenue will remain at about 6-8% for the coming two or three quarters," Berry said.

 

Britannia is also restructuring its sales channels and appointing mega distributors to increase revenue and optimise its operations.

 

"The reason for doing the mega distributor is to get better control on our distribution, making sure that we have to deal with one mega entity and make sure that we put in the right processes. There were a lot of distributors so we are trying to just restructure it and see how we can take it to the next level," Berry said.

 

At the same time, Britannia is also strengthening its presence on online sales channels, with special focus on quick commerce, which is one of its key growth drivers of premium-priced and innovative products. Online sales account for 4% of the company's top line and quick commerce accounts for 75% of the business from online sales.

 

However, Britannia is now reassessing its strategy in cakes. Unlike biscuits, the company's cakes portfolio suffered both revenue and volume losses after the company raised prices in the past few quarters.

 

"Cake has not been a great story. Cake growths are single-digit...we had a margin issue on cake and we tried to move price point from INR 10 to INR 15 and we sustained a certain volume and revenue losses when we did that", Berry said. "We thought price points are not as critical today, but it seems that they are so. We are reassessing that strategy obviously; we do want to get the margins up."

 

At 1237 IST, shares of Britannia traded at INR 5,380.00, down by 4.53% on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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