In croissant and wafers are you the number 1 player, and is the 40% dairy GT growth a base effect or sustainable?
Dairy GT growth is sustainable for several years now that Britannia is price competitive, having previously sat at a 25-30% premium to its largest competitor. Modern trade and other channels still need to be fixed.
Volume growth is only ~2% versus peers improving from 4Q to 1Q; is the East distribution rejig hurting volume and are there green shoots?
With the inflation seen, revenue growth will exceed volume growth and transactions are the better metric, with transaction growth at 12%. The volume-revenue delta should remain at 6-8% for the next 2-3 quarters before volume catches up.
How is the SAR INR 52 crores impact calculated and how should we model it going forward?
The SAR charge is fully dependent on stock price movements as employee SARs are revalued each period. Britannia plans to smooth this out better in the next financial year.
Do you anticipate further acceleration in revenue growth through the rest of FY26 given pricing is largely behind us?
Global uncertainty including US trade tensions makes consumer sentiment hard to judge. Britannia hopes to sustain the strong Q1 momentum through the year.
How big is the duty cut plus base price cut in gross margin terms; 50 bps or 100 bps?
It is difficult to put a quantification on the gross margin impact because international prices also move and interact with the duty cut. No specific number was provided.
Has regional competition shifted from being purely RM-driven to being innovation-led and more structural?
Industry margins have moved from 3-4% to teens over 14 years, attracting Indian entrepreneurs whenever margin potential exists. Some regional players will sustain themselves and Britannia must read their strategies and act to defend its numbers in those territories.
How should one think about the SAR P&L impact for a 10% increase in stock price in a quarter or two?
In a normal market the SAR charge moves with stock price, but the recent turbulence with the stock falling and recovering created an unusually wide range and hence the bump. With smoother conditions the charge volatility should reduce.
Is there a resurgence of the number 3 player ITC in biscuits, and why is the market share issue restricted to only 2 regions out of 7?
The region with turmoil is the East, driven by an internal restructuring to mega distributors rather than regional player aggression, which let local players gain. ITC has been very rational and competition overall has been clean, with shares within band.
Will the mega distributor restructuring drive better long-term margins, and is the inflation-deflation cycle a worry on demand?
Britannia is no longer worried about the inflation-deflation cycle as conditions have stabilized. The mega distributor strategy is aimed at gaining better control of the fragmented Eastern distribution and putting in the right processes.
With commodities cooling and ~7.5-8% pricing in the system, has gross margin bottomed and can we expect sequential improvement?
Q1 still carried prior-quarter inflation that had not been fully mitigated through price increases, but pricing is now complete. With commodities within a band, margins can only improve from here.
A&P spend was reduced 19% last year; how are you investing behind brands and what is the digital spend strategy?
A&P was rationalized in Q1 with a focus on IPL and digital across the top 4 brands, given inflation pressures. From this quarter Britannia is back to normal A&P spend levels.
What is the salience of quick commerce given e-commerce is 4% and you have offerings like Fox Nuts, Be You Protein Bars and Croissant?
Quick commerce contributes about 75% of total digital commerce business, with non-biscuit categories at 8%+ salience. Croissant draws ~35% of sales from e-comm and Pure Magic Stars draws ~50% from q-commerce, making digital channels critical for innovations.
Will higher competitive spends to deal with regional competition pressure EBITDA margins for full year FY26?
Pricing is complete and Britannia has built a war chest to spend selectively against regional players in specific territories. With commodity cycles stabilizing, management is confident of sustaining or improving FY26 EBITDA margins versus last year.
What is your outlook on other operating income for full-year FY26 and what is the capex plan?
Other operating income was elevated in Q1FY25 due to a Ranjangaon ultra-mega project windfall and will be linear hereafter. Capex for FY26 will be tight at around INR 100 crores, much lower than recent years.
When will the palm oil cost and duty reduction hit; is it Q1, Q2 or Q3?
The government duty reduction came around May 2025. Part of the benefit landed in Q1, but the larger impact will come in Q2.
Will commodity-driven cost benefits be passed on to consumers or retained to repair margins?
Britannia will largely retain the commodity benefits rather than passing them on. Targeted price actions may be taken in specific territories where competitive intensity demands it.
Is the Hindi heartland the main driver of company-wide growth, or can other regions deliver mid-single-digit volume growth over the next 3-5 years?
The Hindi belt is a focus area for market share but is not the only growth driver. Britannia must grow penetration across all states including the South to deliver overall company growth.
Is the South still a mid-single-digit growth industry given high penetration and per capita consumption?
Within aggregate share there are subcategories with significant headroom such as Wafers and Croissant in the South where Britannia is underleveraged. Growth is a grid of channel and geography, with modern trade and quick commerce adding new dimensions.
Are there portfolio gaps in health, nutrition and wellness given strong traction for D2C/quick commerce brands like SuperYou?
Britannia is tracking health and indulgence trends and has launched NutriChoice 100% Millets for health and Pure Magic Choco Tarts plus Milk Bikis Smart for indulgence and kids' nutrition. Management agrees start-ups in adjacent categories warrant continued attention.
What is the progress on the distribution reforms (RTM) called out last quarter to increase volume per output?
The RTM project has been live for 4 months with one-third of scope rolled out and a target of 70% of urban retail in the next 4-5 months. Pilot stores show high single-digit delta growth in biscuits and even higher in Cake, Rusk and Croissant.
Is the positive raw material outlook based on specific markers or just general optimism?
The view is grounded in basic supply-demand construct of the commodities, which has been factored in. That gives confidence that the price outlook should be quite stable.
Can you give more color on cakes and breads within the adjacency portfolio?
Bread is doing well with good growth and improving margins, with footprint now expanded beyond the North into Hyderabad, Bangalore, Chennai and Mumbai. Cake growth is single digit because the move from INR 10 to INR 15 price points caused volume losses; the strategy is being reassessed and Brownie within Cake is doing extremely well.
If the stock stays at current levels for the next 2-3 quarters, is this INR 52 crores SAR charge the full year amount?
Yes, if the stock price is stable there will be no further SAR charge. A 10% move would add only a small incremental amount, though Ramamurthy Jayaraman clarified the Black-Scholes model means it is not a simple linear extrapolation.
What is your current market share in quick commerce, the channel's competitive and fragmentation risks, profitability versus other channels and share of A&P spend?
Q-commerce is 75% of e-commerce, supplied to 160 cities and 3,500 dark stores, with Britannia's e-commerce market share running about 500 bps higher than overall share. The channel is in investment phase for profitability, augments the core distribution rather than conflicting with INR 5/10 price packs, and profitability is driven by premium mix like NutriChoice.