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Informist, Friday, Aug. 7, 2026

 

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--Britannia Ind: There were sales headwinds in West Asia market 
--CONTEXT: Comments made by Britannia Ind mgmt in post earnings analyst call 
--Britannia Ind: Cautious on flour prices due to El Nino, monsoon 
--Britannia Ind: Mitigated half of cost inflation via price hikes in Q1 
--Britannia Ind: Advertisement spends outpaces revenue growth in Apr-Jun 
--Britannia Ind: Internal teams working on rolling out non-bakery products 
--Britannia Ind: Expect price hikes of 1.5% going ahead 
--Britannia Ind: Future price hikes may be by reducing product grammage 
--Britannia Ind: E-comm major growth driver for premium non-biscuit category 
--Britannia Ind: Expect international business to be on growth track from Q2 
 

 

By Avishek Rakshit and Adithya Aji

 

KOLKATA – After failing to fully pass on rising input costs to consumers through price hikes in the June quarter, Britannia Industries Ltd. is considering raising product prices by at least 1.5% going forward. During the June quarter, the company raised prices, but these offset only half of the increase in input costs.

 

The price hikes may, however, be implemented by reducing pack sizes rather than directly increasing the maximum retail price. Reducing pack size has been Britannia's preferred method of implementing price increases in the past. The fast-moving consumer goods industry, which includes Britannia, refers to this practice as 'shrinkflation.'

 

"Our pricing growth, which we put in the (June) quarter, was what we call shrinkflation... But going ahead in the (September) quarter, yes, you will see something more coming in. So, if the overall impact was 1%, you would probably see maybe another 1.5% to 2% coming in," Rakshit Hargave, managing director and chief executive officer at Britannia, told sector analysts in a post-earnings conference call Friday. 

 

Although costs of flour, the key raw material for the company, declined 3% sequentially in the June quarter, other input costs have been rising for Britannia. For instance, refined palm oil cost increased by 6% and milk procurement cost went up by 2% on quarter. Sugar prices also increased 3% on quarter. The cost of laminates – the key packaging material – increased 21% sequentially in the June quarter, and industrial diesel costs increased by 67% on quarter in the June quarter.

 

Hargave cautioned that an erratic monsoon and the effects of the El Nio weather system could hurt wheat output, which in turn could raise Britannia's flour procurement costs. At the same time, the company is grappling with spiralling sugar costs, which have been rising week after week.

 

Meanwhile, Britannia will maintain its advertising momentum to drive sales. In the June quarter, its advertising spending grew faster than revenue on a year-on-year basis. Hargave said the company's advertising initiatives yielded positive results in terms of value and volume growth while deepening consumer engagement.

 

India's bakery industry is highly competitive. Apart from Parle, Britannia also faces significant competition from deep-rooted local brands. 

 

As it seeks to become a total foods company, Britannia is expanding its product portfolio and has set up internal teams to achieve this goal. "There is work at an internal level happening in the company. And the company is extremely committed and serious about expanding its portfolio beyond the kind of bakery products that we have today. So, you have to wait and watch," Hargave said. 

 

For instance, Britannia expanded its dairy products portfolio, which largely comprised cheese, to include ghee, curd, and milkshakes. It also launched protein bars and health bars under the 'Be You' brand. Apart from biscuits, the company's bakery portfolio also includes bread, rusk, snacks, and cakes. 

 

"Cake, rusk and wafers delivered double-digit growth (in the June quarter). So, that is growing faster than the average. Also, our dairy business grew at double digits and our ghee business, along with cheese slices, is doing very well," Hargave said.

 

In line with industry trends, Britannia will continue to strengthen its presence in e-commerce and quick commerce platforms, primarily to drive premium product sales. "Q-com (quick commerce) is now literally (accounts) 80-85% of overall e-commerce for us. It is growing in very, very healthy double digits. The investment and focus with even sharpened portfolios will continue. You will see more things in the near future," the top company official said. Later during the call, Hargave said Britannia was seeing traction, particularly in its adjacent businesses, through these sales channels. He said the company will use these platforms to launch exclusive products available only online. 

 

Even as Britannia faces strong headwinds from the war in West Asia, which has engulfed the entire region in conflict and led to sharply higher input costs and heightened global uncertainty, the company expects its international business to resume growth from the September quarter onwards. 

 

The conflict has affected Britannia on two fronts – higher costs and weaker exports. The company is exposed to crude oil prices through diesel used in its manufacturing operations and transport network, while it also exports products to West Asia, the US, Africa, and parts of Southeast Asia. Shipping disruptions caused by the conflict have hurt exports to Africa and the US, while the war has weighed on sales across the West Asian region. 

 

"We have a new head of our international business who joined us two months back. So, our ability to execute and come together is better, and we are expecting that our international business from this quarter will be back on a growth track," Hargave said.

 

One of the country's two largest bakery companies, Britannia, Thursday reported June-quarter earnings in line with Street expectations. Consolidated net profit rose nearly 14% on year to INR 5.9 billion, while revenue increased more than 8% to INR 50.0 billion.

 

At 1151 IST, its shares traded nearly 3% up at INR 5,557.50 on the National Stock Exchange. End

 

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

 

Edited by Saji George Titus

 

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