Now Reading: Britannia recovers from dual pricing shock, volumes up 9%
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Britannia recovers from dual pricing shock, volumes up 9%
Britannia Industries' revenue grew 9.5% year-on-year to Rs 4,964 crore in Q1FY27, with volumes rising 9% as the dual-pricing disruption that hurt sales in April and May faded. The company stuck to…
The Story in Brief
Britannia Industries' revenue grew 9.5% year-on-year to Rs 4,964 crore in Q1FY27, with volumes rising 9% as the dual-pricing disruption that hurt sales in April and May faded. The company stuck to Rs 5 and Rs 10 packs while rivals used odd price points like Rs 4.5 and Rs 8.9 after GST changes, causing temporary market share loss. By June, the general trade channel recovered and grew 1.5x faster than in FY26.
However, Livemint reports that gross margin fell sequentially to 41.5% due to high costs of LPG, palm oil, sugar and milk. Ebitda margin slipped to 16.8%, missing estimates. HDFC Securities expects margin moderation of 50 basis points over the next two quarters. International business was weak due to the West Asia war, though Africa markets led by Kenya performed well. The stock trades at a rich 43 times FY28 earnings.
The Indian Opinion
The 'Britannia is back' narrative overlooks a sticky margin squeeze. Sugar, milk and palm oil costs remain elevated, and the company passed on only half of the inflation in Q1. Higher ad spends also dented profits. The real test is not market share recovery from a temporary glitch, but whether Britannia can hold its 16.8% Ebitda margin while it experiments with regional teams and Dubai Kunafa Croissants. If Q2 margins slip a few basis points, the stock's 43-times FY28 PE will look rich.
Source: livemint.com
This story was synthesised by AI from the source linked above.
