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Informist, Friday, May 8, 2026

By Avishek Rakshit and Gunjan Rajput

KOLKATA/NEW DELHI – Britannia Industries Ltd. is set to increase prices in a calibrated manner June quarter onwards despite having fair priced inventory at least for the next 5-6 months and is also confident of regaining sales volume growth especially in rural areas in the coming few months.

"The inventory that we are holding right now is a favourable one," Rakshit Hargave, the managing director and chief executive officer at Britannia Industries, told sector analysts in a post-earnings call Friday. Hargave said the despite a sharp increase in crude oil and laminates costs, Britannia is well covered against inflation in key raw material costs like palm oil and wheat. 

"In terms of palm oil, we are covered for the next five months and I think we have a favourable rate against the market. Also on wheat, the inventory that we have right now, I believe we are now already covered for about five and a half, six months, is also at a price which is attractive. Even if you add the carrying and the inventory cost," Hargave said.

Britannia does not give the break-up of the cost structure like every raw material component. However, sector analysts estimate that being a bakery company, wheat, palm oil, and milk are the key raw materials for Britannia. 

Britannia's flour costs declined 6% on year and 4% on quarter during the March quarter and palm oil costs declined 12% on year but rose 4% on year. However, milk prices shot up 17% on year and 3% on quarter in Jan-Mar and sugar costs increased 5% on year but declined 1% on quarter. 

The cost of laminates, which is used to package products declined 7% on year and 4% on quarter in the March quarter, and cocoa costs declined 16% on year and 9% on quarter. 

However, the crisis in West Asia has necessitated a price increase, Hargave said although the fuel crisis arising from the blockade in Strait of Hormuz has not caused any material disruption in India, he said. 

"There has been no material disruption to production operations at our Indian manufacturing facilities on account of these fuel supply constraints...We are anyway already working on alternate fuels and options," the top official said. Although Hargave said that apart from fuel cost inflation, actual manufacturing has been quite steady for Britannia, the company is going to increase prices of its products. 

"We obviously will need to take some mitigation measures for this. And we have initiated the mitigating measures. So, there will be calibrated price increases starting from this quarter," Hargave said. 

Even as Britannia, one of the largest bakery companies in the country, is set to increase prices, which ideally leads to volume loss, the company is confident of witnessing volume increase in rural areas. 

Even as Britannia, one of the largest bakery companies in the country, is set to increase prices, which ideally leads to volume loss, the company is confident of witnessing volume increase in rural areas. 

In the March quarter, Britannia increased the grammage in its packs to pass on goods and services tax cut benefits to consumers. However, it competitors reduced actual prices instead of grammage. Hence, to the end consumer, the packs from competitors became lower priced and lucrative compared with Britannia. 

Eventually, it led the company to lose sales in the March quarter. However, since Britannia increased the grammage in the packs, it led to an increase in sales volume but loss in the number of sales transactions.

"Because of some dual pricing in the market, (it) has caused some challenges in our rural channels and in our wholesale channels. So as a result of that, we have seen some kind of a transaction slowdown in those channels," Hargave said. 

Dual pricing refers to the prevalent scenario when a similar product is sold to consumers at two different effective price points.

Hargave, however, said that such dual pricing situation in the market is ebbing away now and the industry is headed towards more uniform pricing, which may help Britannia increase sales. GST rate cut benefits are more visible to consumers on higher priced packs than lower ones and Britannia is not actively promoting sales of packs prices at INR 5 and INR 10, Hargave said. The lower priced packs sell more in rural areas. 

The top official said that Britannia will continue to focus on increasing market share which it has been focusing on since the past several quarters. However, its marketing and promotional activities will not result in margins being sacrificed towards this effort.

"I think we have to keep going stronger on market share. But like we said we are also adept at managing margins. So it is a careful orchestra, which we will play very nicely...We don't want to compromise one for the other," Hargave said. 

At 1240 IST, shares of Britannia traded around 5% down at INR 4,5531.5 on the National Stock Exchange. End

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

Edited by Akul Nishant Akhoury

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