Now Reading: Britannia to hike biscuit prices by 1.5-2% as input costs bite
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Britannia to hike biscuit prices by 1.5-2% as input costs bite
Britannia Industries plans another 1.5-2% price hike in the September quarter, mainly through shrinkflation in Rs 5 and Rs 10 biscuit packs, as sugar and palm oil costs stay high. The company's…
The Story in Brief
Britannia Industries plans another 1.5-2% price hike in the September quarter, mainly through shrinkflation in Rs 5 and Rs 10 biscuit packs, as sugar and palm oil costs stay high. The company's June quarter revenue rose 9.5% to Rs 4,964 crore, with volume growth of 9%. However, EBITDA margin fell sequentially to 16.8% due to higher ad spends and commodity inflation.
Rival FMCG firms are taking similar steps. Godrej Consumer, HUL, Dabur, and Tata Consumer all flagged further calibrated price increases, citing elevated palm oil, crude-linked inputs, and West Asia tensions. Britannia expects to hold FY27 EBITDA margin at last year's level. The stock trades at a P/E of 43, down 13% from its 52-week high.
The Indian Opinion
The spin that FMCG price hikes show 'strong demand' hides a simpler truth: companies pass on costs because they can, and consumers have little choice. Britannia's Rs 5 and Rs 10 packs, 60% of sales, are being shrunk again. The real test will be volume growth in the next two quarters. If demand stays robust despite 2-5% inflation across the sector, the narrative holds. If volumes dip, expect the same executives to suddenly discover 'subdued sentiment'. Watch Q2 data from Nielsen.
Sources (2): livemint.com, cfo.economictimes.indiatimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
