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Informist, Friday, Nov. 7, 2025

 

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--Britannia: Looking forward to 'aggressive' revenue growth
--CONTEXT: Comments by Britannia's management in post-earnings investor call
--Britannia: Looking at revenue-driven, volume-driven growth in coming days
--Britannia:Confident of competing effectively with local players going ahead
--Britannia: Looking at taking away market share from local players
--Britannia: Compliance in tax of local bakery cos is questionable
--Britannia: 5% GST on biscuits to help snatch mkt share from local cos
--Britannia: Will become competitive in pricing wherever necessary
--Britannia: Margins may dip in coming days as focus is on revenue growth
--Britannia: Talking to pizza makers for institutional sales of cheese
--Britannia: Looking to launch protein drinks in ready-to-drink format
--Britannia: Not looking at entering more product categories
 

 

By Avishek Rakshit & Adhithya Aji

 

KOLKATA/MUMBAI - Britannia Industries Ltd. may see a drop in margins in the coming quarters as the company readies itself to take local bakery players head on to increase its market share, which will eventually lead to double-digit top line growth in the coming months. The company will also step up price competitiveness wherever needed to gain market share, a top company official said Friday.

 

This follows the company losing some market share in the eastern part of the country in the September quarter where Britannia has now normalised its distribution strategy. The company's presence in the 'Hindi-speaking belt' – a grouping of states by Britannia where Hindi is the main language – remained strong, but in southern India where Britannia is the market leader, it is yet to figure out how to head towards double-digit growth.

 

"Our focus on competitiveness is going to be very clear. And from that standpoint, there might be some changes in the margin structure, because I think if we have to get aggressive top line growth, then we might have to look at a slight haircut as far as margins are concerned," Varun Berry, vice chairman, managing director, and chief executive officer of the company, told sector analysts in a post-earnings call.

 

In the September quarter, amid market share losses, Britannia was able to hold on to its margins due to cost-saving initiatives but owing to the Goods and Services Tax cuts, the company's top line growth was 4%. Berry said that the company lost 2-2.5% revenue potential in the September quarter owing to channel destocking due to the GST cut rollout at the onset of the festival season.

 

Although like all consumer goods companies, Britannia was temporarily hit by the GST rate cut in the September quarter, Berry said the GST cut would help the company garner more market share in the coming days along with volume growth, which Britannia may capitalise into "aggressive" revenue growth.

 

"I would certainly think that we should be looking at getting to double digits in due course because there seems to be a very positive sentiment around consumer goods and especially foods," Berry said.

 

Berry reasoned that Britannia's competition with local bakery companies was only on pricing but the local bakery manufacturers may slip on regulatory issues, including taxes. Lowering of the GST slab on biscuits to 5% from 18% may upset local players' tax compliance, and with effective scale-up of distribution, larger bakery companies, including Britannia, stand to gain.

 

"There are a lot of these small regional players who operate in very small territories. We don't know their compliance on taxation. When it was 18%, the risk reward was in their favour. But now it's 5%. So, our competitiveness with the players is now going to be holding us in really good stead to be able to compete with these guys," Berry said, adding that given the scale of Britannia's operations and efficiency, the company would be able to compete much better with regional competition.

 

He said that Britannia's ability to come up with differentiated products could also give it an edge as localised bakery companies mainly compete with their larger counterparts on basic bakery products, either offering lower prices or giving higher commission to retailers and distributors. Britannia is of the view that the GST rate reduction will help the bakery market in the country turn more organised and consumers will tend to shift to larger brands that offer differentiated products.

 

"I think now on, what we are looking at is a top line-led, volume-led growth to make sure that we cement our dominance in the category," Berry said.

 

For its range of cheese products, Britannia is in talks to further scale up its institutional sales with large pizza makers in the country. Berry said that while the cheese category had grown at a high pace in the last financial year, the momentum had slowed currently, which led to more competition in modern trade channels like large-format grocers, which were also pushing for discounts from Britannia. The company's range of diary-based beverages was also hit in the September quarter on account of a short summer and prolonged rains, which brought the mercury down.

 

Britannia is looking at rolling out ready-to-drink protein drinks but will stay clear off whey powders. Berry reasoned that at the current stage of operations, Britannia will not be able to produce the quality of whey needed for the whey powders used by bodybuilders.

 

"We are not looking at entering more categories. We are looking at consolidation and making sure that the categories that we operate in become much larger than what they are currently," Berry said.

 

Britannia will also intensify its regional play and come up with products more suited to a particular region. 

 

At 1148 IST, shares of Britannia were up 1.7% at INR 6,115 on the National Stock Exchange.  End

 

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

 

Edited by Avishek Dutta

 

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