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Informist, Wednesday, Aug. 6, 2025

By Afra Abubacker and Avishek Rakshit

MUMBAI/KOLKATA – Britannia Industries Ltd. foresees commodity prices to be largely stable going ahead due to expectations of comfortable raw material supply amid improved kharif sowing. "From here on, we do not see the kind of wide fluctuations that we've seen on commodity in the last two years," Varun Berry, vice chairman, managing director and chief executive officer of the company, said. 

With a good kharif output on the horizon, the fast-moving consumer goods major expects input costs to be stable in the coming quarters. In the past, the company has "covered most of (input) inflation through price increases. We are done with that, and we are in a good position," Berry said in a post-earnings conference call Wednesday.

The June quarter was a "reasonably stable quarter" in terms of commodity prices. However, on a full-year basis, prices have been "very turbulent," Berry said. 

During Apr-Jun, flour prices slipped 3% on quarter but were up 8% on year. Palm oil prices deflated 3% on quarter, but were 45% higher on year. Though sugar rates have increased 5% on quarter and 3% on year, it is "within boundaries" and "manageable", he added. Cocoa prices were 10% down on quarter, and 35% up from last year, the company said. 

Asked if the company benefitted from lower duty on edible oil imports, Berry said some benefits came in the June quarter and more benefits from easing palm oil import costs will be seen in the coming quarters. On May 30, India cut the duty on crude edible oils to 10% from 20% to curb inflation and boost domestic refining activity. 

The bread and biscuit major is also set to benefit from good wheat production in the country, which is pegged up 4% on year at 117.5 million tonnes in 2024-25 (Jun-Jul). Meanwhile, gross sugar production is estimated to rise 18.3% on year to 34.9 million tonnes in 2025-26 (Oct-Sept) due to abundant rainfall and overall improvement in crop quality. 

As of Friday, acreage under kharif sowing has increased 5% on year, and farmers have already covered 85% of the normal area. Early onset and good progress of the southwest monsoon along with adequate reservoir levels have boosted kharif cultivation. "Supply-demand concept of the commodities have been factored in and that's why we feel that price outlook should be quite stable in terms of commodities," Berry added. 

As of Thursday, the water level in 161 key reservoirs across India was nearly 50% higher on year at 126.482 billion cubic metres amid above-normal rains. The current water level is at a six-year-high, according to data collated by Informist. Monsoon season contributes around 70% to India's annual rainfall and replenishes reservoirs and water bodies. Since Jun. 1, the country has received 507.7 millimetres of rainfall, 3% above normal for the period. 

The company 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's consolidated net profit for the June quarter rose nearly 3% on year to INR 5.2 billion, but missed the Street's estimate of INR 5.7 billion for net profit. On Wednesday, shares of Britannia closed at INR 5,402.5, down 4.13% on the National Stock Exchange. End

Edited by Tanima Banerjee

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