Britannia Industries vice-chairman, MD & CEO Varun Berry flagged uncertainty in urban demand with the overhang of tariffs & job, and technological disruption hurting sentiment among the salaried class. Addressing investors in a post-earnings call on Wednesday, Berry said that he sees turbulent times ahead, though policy interventions from the government and central bank could help soften the impact.
“It is difficult to gauge where sentiment is headed in the current market. These are turbulent times, but the policy interventions from the government and central bank could give a boost to consumption. We are monitoring the harvest output, since it impacts commodity prices, which is critical for us,” Berry said in response to investor queries on the subject.
Berry’s observation comes after Rohit Jawa, former MD & CEO of Hindustan Unilever (HUL), last week pointed to similar concerns, saying tariff concerns and tech layoffs have the potential to disrupt urban demand. While sentiment among informal rural and informal urban consumers had seen a resurgence, Jawa said, the salaried class had remained largely cautious in terms of spending amid job and visa concerns.
Berry said that the focus for Britannia remains on driving consumption in core categories such as biscuits, bread, cake and rusk. Britannia derives around 75-80% of its revenue from biscuits while 20-25% comes from segments such as bread, cake, rusk, dairy and croissants.
Battling Regional Players with a ‘War Chest’
The company is also creating a war chest to fight regional players, notably in biscuits.
“We are going to fight many battles in, smaller territories and we are doing a specific analysis on each one of these competitors and I think we are in a very good place to be able to do so now with the inflation-deflation cycle behind us and having been able to mitigate inflation with all the measures including cost efficiency programme,” he said.
The company reported a 3% year-on-year growth in consolidated net profit for the June quarter to `521 crore compared to the consensus estimate of `569 crore by Bloomberg. The consolidated revenue growth came in at nearly 9% to `4,622 crore, which compares favourably with the Street estimate of `4,611 crore for the quarter.
Navigating Price Hikes and Margin Pressure
However, volume growth for the quarter was 2%, while price-led growth was around 6%, sector experts said, as Britannia passed on select commodity inflation to consumers.
Despite the pricing action, Ebitda margins for Q1 stood at 16.4% versus analysts’ average estimate of 17.7% for the period. It was down 130 basis points when compared to last year, though Berry said he saw margins improving in FY26.
“We are pretty happy with our transaction growth of 12% and volume growth will also come back slowly and steadily. However, the delta between volume and revenue will remain at about to 6-8% for the coming two or three quarters,” he said.
Britannia had spent much of FY25 raising prices in response to commodity inflation. While the company was almost done with the cycle of price hikes, he said FY26 would not see price-cuts by the company in response to commodity deflation.
“I think from here on, we do not see the kind of wide fluctuations that we have seen in commodities. And we always perform better in stable conditions. We have covered most of our inflation through our price increases. We are done with that and we are in a good position today,” he said.“I think from here on, we do not see the kind of wide fluctuations that we have seen in commodities. And we always perform better in stable conditions. We have covered most of our inflation through our price increases. We are done with that and we are in a good position today,” he said.