Britannia Industries to Adjust Prices Amid Rising Costs

Strategic Price Adjustments by Britannia

Britannia Industries, the leading biscuit producer in India, is planning to implement targeted price increases and reduce product grammage in the upcoming quarter, as stated by managing director and CEO Rakshit Hargave. This strategy is designed to protect profit margins from the escalating costs of palm oil, laminates, fuel, and freight, which have been affected by the ongoing conflict in West Asia. Hargave mentioned, "We will need to adopt some mitigation strategies, and we have begun to implement measured price hikes starting this quarter. These adjustments will include changes in grammage, and certain products priced above Rs 10 will experience a price increase." He added, "The impact from West Asia began to affect us in March after a relatively stable first two months. We faced challenges in dispatching vessels due to the closure of the Strait of Hormuz."

Additionally, Britannia has declared a final dividend of Rs 90.5 per share. The company reported a 21% increase in consolidated net profit for Q4, with revenues rising by 7.1% to Rs 4,686 crore. The EBITDA margin stood at 18.2%, reflecting a decline of 20 basis points year-on-year and a drop of 186 basis points sequentially. During this quarter, Britannia experienced increased inflation in palm oil, laminates, and fuel costs, while wheat prices showed a deflationary trend. Fortunately, domestic operations were not impacted by fuel and gas shortages stemming from the West Asia conflict. Hargave noted that the company is insulated from immediate palm oil price fluctuations due to secured forward contracts for the next five months, although broader inflationary trends are necessitating these price adjustments. He also indicated that price hikes in international markets are expected to commence from Q1 FY27.