The Britannia Industries’ share price is having a ‘good day’ for the second consecutive session of the trot.
This is after the company’s December-quarter performance suggests the company is moving out of the disruption caused by the post-GST pricing and packaging transition, with analysts predicting a clear acceleration in demand towards the end of the quarter.
According to Elara Securities, this quarter was driven by high single-digit growth in biscuits and double-digit expansion in adjacencies such as cakes and croissants for Britannia, supported by stable commodity costs.
Growth picked up sharply in November-December
Analysts pointed to a strong finish to the quarter after a weak start. October, management said, was a “transition month” that saw a marginal dip, but the business delivered around 12% growth in November and December, with no benefit from channel filling or restocking.
According to JM Financial, November-December growth was driven by a roughly 50:50 split between volume recovery and price realisation, indicating that demand was not purely price-led.
Nomura, meanwhile, pegged Britannia’s Q3 volume growth at about 4.5%, above its own expectation of 2.5%, and said this should improve further in the March quarter as pricing stabilises across the industry.
The Rs 5/Rs 10 price-point reset is still playing out
A key theme in all three reports was the lingering impact of the industry’s staggered shift back to standard Rs 5/Rs 10 “coinage” price points. As per Elara Securities, Britannia reversed prior price cuts in smaller packs by increasing grammage and restoring the MRP to Rs 5/Rs 10, which helped drive recovery.
But JM Financial said some competitors are still transitioning in a staggered manner, and the temporary continuation of Rs 4.5/Rs 9 low-unit packs has likely created tactical gains for competition. The brokerage added that management expects pricing to stabilise by the end of Q4FY26.
According to Nomura, the price-point mismatch has created a temporary retailer advantage, pressuring volumes for players that moved back to Rs 5/Rs 10 with higher grammage. Nomura expects Britannia’s volume growth to move to high single-digit in Q4 as the remaining players transition.
Adjacencies are becoming the growth engine—especially online
Brokerages also highlighted that Britannia’s ‘adjacent’ categories are increasingly important to its growth narrative. Elara said bakery segments such as cake, rusk, croissant and wafers posted double-digit growth, supported by relaunches such as vegetarian cake variants and new capacities.
Both Elara and Nomura flagged that e-commerce contribution for these categories is about three times higher than biscuits, underlining why the company is pushing harder on quick commerce and online channels.
E-commerce is being treated as a separate business unit
One of the most notable strategic shifts outlined in the December-quarter call was Britannia’s decision to treat e-commerce and quick commerce as a distinct business unit.
JM Financial said management plans to incubate digital-first brands and synchronise TV, digital and platform activations to deliver a “360” brand experience. The brokerage noted that e-commerce salience is currently in the high-single digits as a share of sales, with an ambition to move into the low teens by FY27.
Nomura also said the new CEO, Rakshit Hargave, has identified scaling e-commerce and quick commerce as a key priority, targeting a move from high-single digit contribution currently to early-to-mid teens by FY27 through stronger investments and digital-first launches.
Margins surprised sharply, even with higher spends coming
If the topline recovery is still in progress, profitability has already turned meaningfully. Nomura said gross margin expanded to 42.7%, up 400 basis points year-on-year, driven by benign input costs and a favourable base.
JM Financial also flagged a margin beat, estimating gross margin (excluding other operating income) at 42.3%, up 533 basis points year-on-year, helped by stable input costs and price hikes. According to Elara Securities, EBITDA of Rs 980 crore up 16%, with margins rising 132 basis points to 19.7%, driven by lower raw material costs and operating efficiencies.
The margin outperformance, analysts said, is important because management has signalled a higher brand investment cycle. As per Nomura, Britannia plans to increase media spends and brand investments, but it still expects operating margins to sustain around the 20% level.
Commodity basket benign; wheat outlook remains supportive
Brokerages said Britannia’s input environment remained supportive in Q3. Elara pointed to moderation in refined palm oil and cocoa prices, marginal softening in flour and steady milk prices.
JM Financial said the commodity basket remained largely stable, with wheat flour down marginally, edible oil easing, sugar stable, cocoa and laminate softer, while milk remains a monitorable going ahead.
Nomura added that management expects flour prices to remain favourable, supported by higher acreage and expectations of higher output during the crop season.
One-time Bihar incentive, labour code impact
JM Financial noted that a one-time Bihar state incentive of Rs 65 crore accrued in the quarter, which was largely offset by a Rs 48 crore labour code impact.
According to Nomura, operating income declined sharply year-on-year due to reduced entitlement to state fiscal incentives after GST changes, and said Britannia is in discussions with state governments to continue incentives in some other form.
Dairy: cheese underperformed
While adjacencies are delivering growth, the dairy business remains mixed. Elara said dairy saw marginal cheese growth, while ghee, milk drinks and whitener expanded faster as the business enters its peak season.
As per JM Financial, cheese underperformed expectations, prompting corrective steps including a new head for the dairy business, JV collaboration with Bel Group, focused innovation and modern trade initiatives to revive growth.
Britannia appointed Subhashis Basu as chief business officer for dairy, effective 15 December 2025, and he will also lead the Britannia-Bel Foods cheese JV, as per Nomura.
Competitive playbook: “startup-style” interventions against regional rivals
Britannia is also sharpening its competitive response in regions where local players remain aggressive. JM Financial said management acknowledged that the East remains a hotbed of competition, with other clusters also seeing local challengers, and that the company plans “startup-style micro-plays” involving quicker local flavour adoption and tactical pricing.
Nomura added that management believes Britannia has held market share against national players and has gained share over the past two years, but sees pockets of active regional units beyond the East.
New CEO’s roadmap
Brokerages said the December-quarter call was also closely watched because it was CEO Rakshit Hargave’s first investor call. JM Financial said he outlined a broader strategy focused on driving sales and supply chain efficiency, stepping up brand investment, elevating brand experience, building a functional foods category, and developing a composite portfolio through a mix of organic and inorganic opportunities.
As per Nomura, Hargave also highlighted the need to invest in innovation, expand the portfolio through new platforms, focus on ‘resident jewel’ brands such as Little Hearts, and evaluate inorganic opportunities to enhance brand relevance.
What brokerages are betting on
Nomura maintained a Buy rating and raised its target price to Rs 7,275, calling Britannia its top pick and expecting the company’s volume growth to improve as price-point competition stabilises.
JM Financial maintained Buy with a target price of Rs 7,000, saying the pace of volume acceleration and the likely reduction in fiscal incentives would remain key monitorables.
Elara reiterated Accumulate with an unchanged target price of Rs 6,975, expecting double-digit sales growth in the near-to-medium term on the back of demand recovery and adjacency momentum.