Q1 2027 Britannia Industries Ltd Earnings Call

Speaker #1: Ladies and gentlemen, good day and welcome to Britannia Industries Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to Britannia Industries Limited Q1 FY2027 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ayush Agarwal from Investor Relations. Thank you. Over to you, Mr. Agarwal.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchtone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Ayush Agarwal from Investor Relations. Thank you, and over to you, Mr. Agarwal.

Speaker #2: Good morning, everyone. This is Ayush from the Investor Relations team. I welcome you all to the Britannia earnings call to discuss the financial results of Q1 for the financial year 2026-27.

Ayush Agarwal: Good morning, everyone. This is Ayush from the Investor Relations team. I welcome you all to the Britannia Earnings call to discuss the financial results of Q1 for FY26-27. Joining us today on this earnings call is our Managing Director and CEO, Mr. Rakshit Hargave; Executive Director and CFO, Mr. N. Venkataraman; Chief Marketing Officer, Mr. Puneet Das; Chief Manufacturing and Procurement Officer, Mr. Manoj Balgi; Vice President, Marketing, Mr. Siddharth Gupta; and Vice President, Corporate Finance, Mr. Ramamurthy Jayaraman. The analyst deck is uploaded on our website. Before I pass it on to Mr. Rakshit Hargave, I would like to draw your attention to the safe harbor statement in the presentation. Over to Mr. Haldawer with remarks on the performance.

Speaker #2: Joining us today on this earnings call are our Managing Director and CEO, Mr. Rakshit Hargrave; Executive Director and CFO, Mr. N. Venkataraman; and Chief Marketing Officer, Mr. Puneet Das.

Speaker #2: Chief Manufacturing and Procurement Officer, Mr. Manoj Balvi; Vice President, Marketing, Mr. Siddharth Gupta; and Vice President, Corporate Finance, Mr. Ramamurthy Jaidaman. The analyst deck is uploaded on our website.

Speaker #2: Before I pass it on to Mr. Rakshit Hargrave, I would like to draw your attention to the Safe Harbor statement in the presentation. Over to Mr. Hargrave for remarks on the performance.

Speaker #3: Thank you, Ayush, and good morning to everybody. It gives us great pleasure to engage with you to discuss our Q1 results. You have the presentation, which is uploaded.

Rakshit Hargave: Thank you, Ayush. Good morning to everybody. It gives us great pleasure to engage with you to discuss our Q1 results. You have the presentation, which is uploaded. I will go through that one by one, subsequently we have a chance to interact through Q&A. If we go to the main business overview, you will see that on a performance scorecard basis, our revenue from operations at a console level in Q1 were about INR 4,964 crores, which on an annual basis gave us a growth of 9.5%. It is also important to note that actually at a standalone basis, we grew at 10%. PAT was at about 11.9% of revenue, and the 12-month growth on PAT was 13.6%.

Speaker #3: So I will go through that one by one, and then subsequently, we will have a chance to interact through Q&A. So if we go to the main business overview, you will see that on a performance scorecard basis, our revenue from operations at the consolidated level in the first quarter was about ₹4,964 crore, which on an annual basis gave us a growth of 9.5%.

Speaker #3: It's also important to note that, actually, on a standalone basis, we grew at 10%. Packed was at about 11.9% of revenue, and the 12-month growth on Packed was 13.6%.

Speaker #3: We shared our strategic priorities last time, and they continue to be the main source. So, just to reiterate the five pillars that we have put forward, you can see that we continue to drive efficiencies in sales, distribution, and supply chain.

Rakshit Hargave: We shared our strategic priorities last time, they continue to the main scope. Just to reiterate the five pillars that we have put, you can see that we continue to drive efficiencies in sales, distribution, and supply chain. We are working on all channels. Our investments in elevating brand experience has gone up. We talked about innovation being a core to Britannia and developing our adjacencies business and also working on our future platforms on which we talked about. The future platforms which we will be working on our health side. We talked about how we have created enterprising teams to work on the concept of winning in many Indias.

Speaker #3: We are working on all channels. Also, our investments in elevating brand experience have gone up. We also talked about innovation being core to Britannia, developing our adjacencies business, and working on our future platforms, which we talked about.

Speaker #3: Also, the future platforms which we will be working on are on the health side. We also talked about how we have created enterprising teams to work on the concept of winning in many Indias.

Speaker #3: I am very happy to state that many of those projects are already underway, and you should also be seeing output from those projects in a short period of time, as they continue.

Rakshit Hargave: I am very happy to state that many of those projects are already underway, you should also be seeing output of those projects in a short period of time as we keep continuing. Obviously, as a responsible corporate citizen working in a sustainable manner, sustainability will always remain part of our strategic fit. If we take a look at the next slide, which shows how have our various channels grown. You will see that the green channel, which is general trade, in the last 3 quarters and noticeably in the quarter which has gone by, is now indexed at a rate which is about 1.5 times of what we had grown in the whole of last year.

Speaker #3: And obviously, as a responsible corporate citizen working in a sustainable manner, sustainability will always remain part of our strategic platform. If we take a look at the next slide, it shows how our various channels have grown.

Speaker #3: So you will see that the green channels, which is general trade, in the last three quarters—and noticeably in the quarter which has gone by—is now indexed at a rate which is about 1.5 times what we had grown in the whole of last year.

Speaker #3: So, that shows that there is a demand buildup in general trade, which is very good, because in general trade, you know, we are very strong, and general trade is by far the largest channel for us.

Rakshit Hargave: That shows that there is a demand buildup in general trade, which is very good because general trade, we are very strong in general trade, and general trade is by far the largest channel for us. Also, at the same time, when you see the orange line. You will see that the other channels, which are obviously more recent and more nimble, continue to grow faster, and at an overall level are nearly at 2.5x of GT. Within that, e-commerce continues to grow very dynamically, with very strong double-digit growth. It's also because it is being driven in that manner. We are very happy with the way e-commerce is developing, and we are very positive about that contributing even more as we go on. We are also categorizing our general trade business. The way we are looking at it, we have separated our key states.

Speaker #3: Also, at the same time, when you see the orange line, you will see that the other channels, which are obviously more recent and more nimble, continue to grow faster and at an overall level are nearly at 2.5x of GD.

Speaker #3: Within that, e-commerce continues to grow very dynamically, with very strong double-digit growth. And it's also because it is being driven in that manner. So we are very happy with the way e-commerce is developing, and we are very positive about that contributing even more as we go ahead.

Speaker #3: We are also categorizing our general trade business in the way we are looking at it. We have separated our key states now. The key states that we are talking about are a block of states which are very important for us, both from a revenue point of view and a profitability point of view.

Rakshit Hargave: The key states that we are talking about is a block of states which are very important for us, both from a revenue point of view and profitability point of view. And obviously, their contribution towards our overall GT business is quite overweighted. Very happy to say that our key states are also showing good growth. You can see that the inflection of the green line shows that these states are on the upswing. And also, the other states, which are relatively smaller compared to them, more nimble, are growing even faster. So other states are about 1.3x of key states. The overall GT business, which, as we also talked about in the last two quarters, for certain reasons, was under a bit of pressure, has recovered out of that, and we can see good momentum.

Speaker #3: And obviously, their contribution towards our overall GD business is quite overweight. Very happy to say that our key states are also showing good growth.

Speaker #3: You can see that the inflection of the green line shows that these states are on the upswing, and also the other states, which are relatively smaller compared to them—more nimble—are growing even faster.

Speaker #3: So, other states are at about 1.3 of key states. So, the overall GD business, which, as we also talked about in the last two quarters, for certain reasons was under a bit of pressure, has recovered out of that, and we can see good momentum.

Speaker #3: Actually, the demand environment in the last few months has actually quite held up, and, you know, we are also making sure that we do the right thing, and we are also happy that the demand is there and it seems to be there at least for the moment.

Rakshit Hargave: Actually, the demand environment in the last few months has actually quite held up. And we are also making sure that we do the right thing, and we are also happy that the demand is there, and it seems to be there at least for the moment. At the same time, in terms of developing our brands, we have tried to be very topical. And while we have activated across multiple platforms, I'm just sharing two interesting visuals. As you know, Marie Gold is a classic brand from Britannia. It is always consumed with tea. And you can see on the left side a front page ad which came out in the TOI, which shows that while you have different teas across India, there is one national binding element, which is Marie Gold. And I think Marie Gold is very important to Britannia.

Speaker #3: At the same time, in terms of developing our brands, you know, we have tried to be very topical. And while we have activated across multiple platforms, I'm just sharing two interesting visuals.

Speaker #3: As you know, Marigold is a classic brand from Britannia. It is always consumed with tea, and you can see on the left side a front-page ad which came out in the TOI, which shows that while you have different teas across India, there is one national binding element, which is Marigold.

Speaker #3: And I think Marigold is very important to Britannia as the absolute perfect choice for anybody who has morning tea. Similarly, on the right-hand side, you will see how NutriChoice is being built into an overall platform for healthy snacking and healthy biscuits.

Rakshit Hargave: It's the absolute perfect choice for anybody who has morning tea. Similarly, on the right-hand side, you will see how NutriChoice is being built into an overall platform for healthy snacking and healthy biscuits. So continuous sustained focus on creating good propositions and sharpening these propositions for our brands will keep continuing. At the same time, we have brands which also engage with the Gen Z and younger consumers, and we're just sharing one example of Little Hearts, which is also growing very fast, and how we celebrated Mother's Day with Little Hearts. And actually, every employee got a printed bag with their own mother's photo, and I think it really drives that. Also, how we push Britannia cake, which is again back on a strong growth momentum, using the same Mother's Day campaign.

Speaker #3: So, continuous, sustained focus on creating good propositions and sharpening these propositions for our brands will keep continuing. At the same time, you know, we have brands which also engage with Gen Z and younger consumers, and we're just sharing one example of Little Hearts.

Speaker #3: Which is also growing very fast, and how we celebrated Mother's Day with Little Hearts. You know, actually, every employee got a printed bag with their own mother's photo.

Speaker #3: And I think it really drives that. Also, how we pushed Britannia Cake, which is again back on a strong growth momentum, using the same Mother's Day campaign.

Speaker #3: Also, our newer innovations—the younger brands—Croissant, the business that we have developed into a very good business, both from a consumer engagement and profitability—you can see the treat Triple Choco Croissant and the Dubai Kunafa Croissant, very recent launches, already growing at more than 30%.

Rakshit Hargave: Our newer innovations, the younger brands, Croissant, the business that we have developed into a very good business, both from a consumer engagement and profitability. You can see the Treat Triple Choco Croissant and the Dubai Kunafa Croissant, very recent launches, already growing at more than 30%. If you take a look at our other adjacency businesses, the Brownie Fudge Cake doing brilliantly. We've also launched Bourbon Rolls. We've launched the rusk on the side, which is Toastea Butter Rusk, and then Sattvam Ghee, which we launched about last year, and also our slice business from the Bel JV, Winkin' Cow. The dairy portfolio also grew in double digits, while our adjacency business of cake, rusk, and wafers delivered strong double-digit growth led by portfolio innovation. You will see a small map of our international business. This is where our businesses are concentrated.

Speaker #3: Also, if you take a look at our other adjacency businesses, the Brownie Budget Cake is doing brilliantly. We've also launched Bourbon Rolls, we've launched the Rusk on the side, which is Butter Toasty, and then Sattvam Ghee, which we launched about last year, and also our slice business from the Belle JV, Parking Cow.

Speaker #3: So the very portfolio also grew in double digits, while our adjacency business of cake, rusk, and vapors delivered strong double-digit growth through portfolio innovation.

Speaker #3: You will see a small map of our international business. This is where our businesses are concentrated. Also, you know, we also have business across ANZ, etc., which are not depicted there.

Rakshit Hargave: We have business across ANZ, et cetera, which are not depicted there. You will see that the international business had a mixed leaning. There were pressures in the Middle East, there were challenges that we have in markets like Saudi, which are being dealt with. North America, which is a very large market, certain headwinds. At the same time, we are very positive that our markets in Africa, led by Kenya, are doing very well. I think overall, rest of international and our Middle East business has been a mixed bag, but we can see that sequentially also they are improving. Now, it also depends on how the geopolitical situation develops, on which we don't really have a point of view. We are prepared to be able to navigate that. Having seen that now for the last four months, how to manage it.

Speaker #3: You will see that the international business had a mixed leaning. There were pressures in the Middle East—there were challenges that we had with markets like Saudi, which are being dealt with—and North America, which is a very large market, faced certain headwinds.

Speaker #3: But at the same time, we are very positive that our markets in Africa, led by Kenya, are doing very well. So, I think overall, the rest of international and our Middle East business has been a mixed bag, but we can see that sequentially, they are also improving.

Speaker #3: Now, it also depends on how the geopolitical situation develops, on which we don't really have a point of view, but we are prepared to be able to navigate that, having also seen that now for the last four months.

Speaker #3: To manage it. Again, some interesting visuals—you know, we know that Milk Bikis is the largest biscuit brand in Tamil Nadu, and obviously, Tamil Nadu also happens to be our biggest state.

Rakshit Hargave: Again, some interesting visuals. We know that Milk Bikis is the largest biscuit brand in Tamil Nadu, and obviously Tamil Nadu also happens to be our biggest state. I think we have a very interesting consumer idea of Thirukkural, where the Kurals, one Kural letter is printed on every Milk Bikis biscuit. I think it has resonated and touched deeply the heart of people who understand Tamil and Tamil Nadu, and I think we have excellent feedback from social media and also on ground as to how an old legacy brand has actually touched the core essence of Tamil Nadu, and I think great work by the team down there. Similarly, you can see that our activations on RAS and outdoors that we have done in Tamil Nadu.

Speaker #3: So I think we have a very interesting consumer idea with Thirukkural, where the Kurals—you know, one Kural verse—is printed on every Milk Bikis biscuit.

Speaker #3: I think it has resonated and touched deeply the hearts of people who understand Tamil and Tamil Nadu, and I think we have received excellent feedback from social media and also on the ground as to how an old legacy brand has actually touched the core essence of Tamil Nadu.

Speaker #3: And I think great work by the team has been done there. Similarly, you can see that our activations on Rusk and, you know, Outdoors that we have done in Tamil Nadu.

Speaker #3: So, a lot of focus is being put on our biggest state to drive that in a much more healthy manner, and it is also showing very good early results.

Rakshit Hargave: A lot of focus being put on our biggest state to drive that in a much more healthy manner, and it is also showing very good early results. Like I said, this is just one element of mini India. Like Tamil Nadu, we have identified six key states and other places where we are focusing both on the consumer and on competition in terms of how to win. ESG, I will share a few facts. Building a sustainable, profitable business. Increasing the participation of women in the factory workforce. I'm very happy to state that we have certain factories where vast majority, literally 90% plus of the people on the shop floor are women. Similarly, our nutrition foundation program, the number of contact points. We reached about 3.97 lakhs in Q1 2027, representing 78% of 2025, 2027.

Speaker #3: And like I said, this is just one element of many in India. And like Tamil Nadu, we have identified six key states and other places where we are focusing both on the consumer and on competition in terms of how to win.

Speaker #3: ESG—I'll share a few facts. Building a sustainable, profitable business also means increasing the participation of women in the factory workforce. I'm very happy to state that we have certain factories where the vast majority—literally 90% plus—of the people on the shop floor are women.

Speaker #3: Similarly, for our nutrition foundation program, the number of contact points—we reached about 3.97 lakh in the first quarter of 2027, representing 78% of 2.527 lakh.

Speaker #3: Similarly, the development of electricity in our plants, through renewable means, has gone up by 16%. And we are trying to exploit it to the maximum limit possible under the respective state laws.

Rakshit Hargave: Similarly, the development of electricity in our plants through renewable means has gone up by 16%, and we are trying to exploit it to the maximum limit possible under the respective state laws. If we go to the cost and financials, take a look at the input cost trends, and you will notice the last two cells. We know that laminate prices, which are also dependent on hydrocarbon prices, have actually gone up for all companies, and we are no exception. One impact, which is more directed towards Britannia, is the industrial fuel. You will see that the inflation on industrial fuel is very steep, and that's also because as a business which does a lot of baking, a large part of baking that we do uses LPG and CNG, and we know that LPG and CNG prices shot through the roof in April and May.

Speaker #3: If we go to the cost and financials, take a look at the input cost trends, and you will notice the last two sales. So, we know that laminate prices—which are also dependent on hydrocarbon prices—have actually gone up for all companies, and we are no exception.

Speaker #3: One impact which is more directly related to Britannia is industrial fuel. So you will see that the inflation on industrial fuel is very steep, and that's also because as a business which does a lot of baking, a large part of the baking we do uses LPG and PNG. We know that LPG and PNG prices shot through the roof in April and May.

Speaker #3: Although they have come down and normalized a bit, they still remain much above the normal level, which was there in February, and we have to watch that carefully.

Rakshit Hargave: Although they have come down and normalized a bit, they still remain to be much above the normal level, which was there in February, and we have to watch that carefully. While we also have biomass, which is used for a certain percentage, and we will obviously strategically going ahead try and mitigate and play down the risk of LPG and CNG. For the moment, that is the reality. At the same time, you see flour has kind of held up, although we have to watch very carefully that with the uncertain situation regarding El Niño and rainfall, what happens because that actually impacts the price of flour and wheat in the coming season. Palm oil we know has shot up. Palm oil is at a high price, and palm oil is also linked to hydrocarbon price, and that also is something to watch out.

Speaker #3: While we also have biomass, which is used for a certain percentage, we will obviously, strategically, going ahead, try and mitigate and play down the risk of LPG and PNG.

Speaker #3: But for the moment, that is the reality. At the same time, you see flour has kind of held up, although we have to watch very carefully that, with the uncertain situation regarding El Niño and rainfall, what happens, because that actually impacts the price of flour and wheat in the coming season.

Speaker #3: But palm oil, we know, has shot up. Palm oil is at a high price, and palm oil is also linked to hydrocarbon prices, and that is also something to watch out for.

Speaker #3: Sugar, you can see here, in Q1 2027 has gone up. But I think all of you would know that in the last two to three weeks, actually, sugar has gone up by a further 7 rupees a kilo.

Rakshit Hargave: Sugar, you can see here, in Q1, 2027 has gone up, I think all of you would know that in the last two to three weeks, actually sugar has gone up by a further INR 7 a kilo. Sugar is a watch-out, and we know that the festive season approaching, sugar is also a sensitive topic. We are watching sugar very carefully. Sugar undeniably is used in a lot of our products. Milk prices are also at a high, although usually milk prices start to come down a bit as the season approaches after August, we will have to see how milk behaves. You can see that from an input cost point of view, as you would have also seen in the press release commentary that we gave, we have to be watchful and careful.

Speaker #3: So, sugar is a watch-out, and we know that with the festive season approaching, sugar is also a sensitive topic, so we are watching sugar very carefully.

Speaker #3: Sugar, undeniably, is used in a lot of our products. Milk prices are also at a high, although usually milk prices start to come down a bit as the season approaches after August, but we will have to see how milk behaves.

Speaker #3: So, you can see that from an input cost point of view—as you would have also seen in the press release commentary that we gave—we have to be watchful and careful.

Speaker #3: Our focus on cost-efficiency programs, where Britannia has been extremely lean, continues. So, the work on packaging cost optimization—where we are trying to remove and reduce waste—is ongoing.

Rakshit Hargave: Our focus on cost efficiency programs where Britannia has been extremely lean continues. The work on packaging cost optimization, we are trying to remove and reduce waste, both at the manufacturing level and at the produce level. Like I said, how do we work better with alternate fuels so that the impact that we have of LPG, PNG can be reduced a bit is a project which is on. Our buying efficiency continues. We are also trying to implement new models on that to see how can we extract more from what we buy. Obviously maximizing the possible use of renewable energy, and also trying to work with authorities to see if we can further expand the renewable energy usage if possible.

Speaker #3: Both at the manufacturing level and at the product level, like I said, how do we work better with alternate fuels so that the impact that we have from LPG, PNG can be reduced a bit in the project which is now.

Speaker #3: Our buying efficiency continues. We are also trying to implement new models on that to see how we can extract more from what we buy.

Speaker #3: And obviously, maximizing the possible use of renewable energy, and also trying to work with authorities to see if we can further expand the renewable energy usage, if possible.

Speaker #3: So, all these projects are on, and we, anyway, take pride in the fact that this is an area where Britannia has done well in the past, and will absolutely continue focusing in the future.

Rakshit Hargave: All these projects are on. We anyway take pride in the fact that this is an area where Britannia has done well in the past and will absolutely continue focusing in the future. If you see the revenue trends, you will see that there is a trend in the last 2 quarters where we are now seemingly back again. We know that this growth of 9% in the last 8 quarters or 9 quarters is equal to maybe the three best quarters that we had. Like I said in the press release, in our commentary, we actually exited the quarter in double digits, kind of mid-teen numbers. We saw that the uptrend was developing, and the sales trend was good.

Speaker #3: If you see the revenue trends, you will see that there is a trend in the last few quarters where we are now seemingly back again. We know that this growth of 9% in the last eight or nine quarters is equal to maybe the previous quarters that we had. And like I said in the press release and our commentary, we actually exited the quarter in double-digit, kind of mid-teens, numbers.

Speaker #3: So we saw that the uptrend was developing, and the sales trend was good. At an average level, what you can see is that FY26 was better than FY25, and Q1 has started on a better note than FY25.

Rakshit Hargave: At an average level, what you can see is that 2025, 2026 was better than 2024, 2025, and Q1 has started on a better note than FY25. On the key financial lines, as you have already seen, from a net sales point of view, 9.5% growth, and operating profit, PBT, and PAT have all been ahead of sales at 12.7%, 13.7%, 13.6%. Similarly, on a five-year trend, you can see the profit from operations at 15.3% is about at an acceptable level, and PBT is also at a level which is there, also in light of the inflationary situation that we had because of these extraordinary circumstances. PAT is what it is based on the PBT that we have been able to deliver. Thank you.

Speaker #3: On the key financial lines, as you have already seen, from a net sales point of view, we had 9.5% growth, and operating profit, EBT, and VAT have all been ahead of sales, at 12.7%, 13.7%, and 13.6% respectively.

Speaker #3: Similarly, on the five-year trend, you can see that profit from operations at 15.3 is at about an acceptable level, and PAT is also at a level which is there, also in light of the inflationary situation that we've had because of these extraordinary circumstances.

Speaker #3: And PET is what it is, based on, you know, the PBT that we have been able to deliver. Thank you. So that was the short presentation that we had based on the deck, and the team here will be happy to take any questions that you have.

Rakshit Hargave: That was the short presentation that we had based on the deck, and the team here will be happy to take any questions you have.

Speaker #1: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone.

Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Mihir Shah with Nomura. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Mihir Shah with Nomura.

Speaker #1: Please go ahead.

Speaker #3: Hi sir, thank you for taking my question, and congratulations on the good set of numbers. Firstly, I just wanted to understand the comment on the quarter ending with mid-teens growth.

Mihir Shah: Hi, sir. Thank you for taking my question, and congrats on the good set of numbers. Firstly, just wanted to understand, the comment on the quarter ending with mid-teens growth. Wanted to understand what is driving this shift. Was it the dual pricing issue that is getting addressed, or is it completely addressed that is aiding this? Was there a weak base in June, or any kind of a quarter-end filling that is driving this? It's just genuine volume growth that you are seeing coming back, as you had indicated? Can this volume growth sustain? That's question number one.

Speaker #3: I wanted to understand what is driving this shift. Was it the dual pricing issue that is getting addressed, or is it completely addressed, and that is aiding this?

Speaker #3: Or was there a weak base in June, or any kind of quarter-end filling that is driving this? Or is it just genuine volume growth that you are seeing coming back, as you had indicated?

Speaker #3: And can this volume growth be sustained? So that's question number one.

Speaker #2: Okay, so assuming that you are asking one question, Mihir, let me answer—you have three questions or sub-questions in that. So, firstly, I would want to clarify that Britannia is a very disciplined sales system, and we largely do sell-in based on sell-out.

Rakshit Hargave: Okay. Assuming that you are asking one question, Mihir, let me answer. You have three sub-questions in that. Firstly, I would want to clarify that Britannia is a very disciplined sales system, and we largely do selling based on sellout. A question like quarter building actually does not arise in our company. We don't do loading. Secondly, yes, if you recall in the last analyst call, we did indicate that there was a bit of disruption in the rural channels and in wholesale because of the dual pricing, which was reducing. We saw that the impact of dual pricing was there to a certain extent in April, and maybe marginally in the H1 of May, but that actually kind of came to an end in the month of June.

Speaker #2: So a question like quarter building actually does not arise in our company. So we don't do loading. Secondly, yes, if you recall, in the last analyst call, we did indicate that there was a bit of disruption in the rural channels and in wholesale because of the dual pricing.

Speaker #2: Which was reducing, and we saw that the impact of dual pricing was there to a certain extent in April, and maybe marginally in the first half of May, but that actually kind of came to an end in the month of June.

Speaker #2: So your question about what is the reason for June being a double-digit good month, there are two answers to it. Yes, the elimination of the dual pricing logically brought back some of the buyers or some of the smaller retailers who were temporarily buying some other brands. But secondly, we also saw that demand is holding up.

Rakshit Hargave: Your question that what is the reason for June being a double-digit good month, there are two answers to it. That yes, the elimination of the dual pricing logically brought back some of the buyers or some of the smaller retailers who were buying, for on a temporary basis, some other brands. Secondly, we also saw that demand is holding up. It was a question of organic demand coming from the ground, which was holding up, and also for this discrepancy which was happening because of dual pricing going away. Now, whether we are able to hold up, I'm not going to give any future indication of how we will do, but we see that the demand environment continues to be strong. We have exited the quarter on a very positive note.

Speaker #2: So it was a question of organic demand coming from the ground, which was holding up, and also for this discrepancy, which was happening because of dual pricing going up.

Speaker #2: Now, whether we are able to hold up—so I'm not going to give any future indication of how we will do—but we see that the demand environment continues to be strong.

Speaker #2: So, we have exited the quarter on a very positive note.

Speaker #3: Got it. That is clear, Akshay. Thank you for that. Secondly, I wanted to understand your view on margins. Given that you indicated that the RM costs are going up, fuel costs have gone up, and ad spend—also, you had indicated that you were stepping it up after you came in.

Mihir Shah: Got it. That is clear, Rakshit. Thank you for that. Secondly, wanted to understand your view on margins, given that you indicated that the RM costs are going up, fuel costs have gone up. Ad spends also, you had indicated that you are stepping it up, and after you've come in. When you look at the coming quarters, you are anyway at a higher end of the margin guidance band or the margin band that you've been doing. Specifically wanted to understand your view on ad spends, how much material step up that you are intending to take. Any insights on a percentage growth or a percentage of sales that you can indicate on ad spends? How should we think about that? How should one think about the pressure on the margins that you're indicating because of the RM and fuel cost?

Speaker #3: And when you look at the coming quarters, you are anyway at the higher end of the margin guidance band, or the margin band that you've been maintaining.

Speaker #3: So specifically wanted to understand your view on ad spends, how much material step-up that you you know, you are indicating you are intending to take, any insights on a percentage growth or a percentage of sales that you can indicate on ad spends that how should we think about that, and how should one think about the pressure on the margins that is that you're indicating because of the RM and fuel cost.

Speaker #2: So let me answer the second part first. So you know, the inflation on LPG was very real, and the price inflation in the month of April and May, and you know, Venkat can confirm, really went up about two and a half times.

Rakshit Hargave: Let me answer the second part first. The inflation on LPG was very real, and the price inflation in the months of April and May, and Venkat can confirm, really went up about 2.5 times. That has come down. From an index point of view, it is at about 1.5, but it is still far more than what we had in February. How does this play out going ahead? We do not know. Currently it is at an index of 1.5. If it remains there, obviously it is something which is affecting us. At the same time, you can see that the input price of sugar, and we use substantial amount of sugar, and the input price of palm oil has also gone up.

Speaker #2: That has come down from an index point of view; it is at about 1.5, but it is still far more than what we had in February.

Speaker #2: Now, how does this play out going ahead? We don't know. Currently, it is at an index of 1.5. If it remains there, obviously it is something which is affecting us.

Speaker #2: At the same time, you can see that the input price of sugar—and we use, you know, a substantial amount of sugar—and the input price of palm oil have also gone up.

Speaker #2: You know, palm oil is at close to 140, and the increase in palm oil is also upwards of 20%. So from a commodity inflation standpoint, the reality is that it is here to stay, and we have to use that to manufacture.

Rakshit Hargave: Palm oil is at close to 140, and the increase in palm oil is also upwards of 20%. Some of commodity inflation, the reality is that it is there to stay, and we have to use that to manufacture. Although I think compared to other manufacturers, our ability to buy and hedge and manage the forward is better. The fact is this inflation is a reality. We also know that these are cycles, and this is also accelerated because of events which are beyond anybody's control. You should not hold it onto the P&L like a permanent phenomenon. This at some time will definitely correct. On the ad spending, yes, we have upped our spending.

Speaker #2: Although I think, compared to other manufacturers, our ability to buy and hedge and manage the forward is better, the fact is this inflation is a reality. But we also know that these are cycles, and this is also accelerated because of events which are beyond anybody's control.

Speaker #2: So, you should not hold it onto the P&L like a permanent phenomenon. This will definitely correct at some point. On the ad spending—yes, we have upped our spending—but I think that's also because last year and the year before, on the base, we had kind of reduced ad spending.

Rakshit Hargave: I think that's also because I think last year and the year before on the base, we had kind of reduced our spend. What we are spending is, I think, the correct amount, which we have now gone back to. I wouldn't want to give a number in terms of percentage of what we are doing. Yes, our spends on brand building are ahead of sales growth, definitely, is what I can tell you. I think what we can already see as a result of better investment in media over the last seven, eight months is that many of our brand tracking health parameters in terms of recall, most often used brands, are showing an uptick. Investing in those is absolutely important. We understand that these are there.

Speaker #2: So, what we are spending is, I think, the correct amount, which we have now gone back to. I wouldn't want to give a number in terms of percentage of what we are doing, but yes, our spends on brand building are ahead of sales growth, definitely.

Speaker #2: That is what I can tell you. And I think what we can already see as a result of better investment in media over the last seven to eight months is that many of our brand tracking health parameters, in terms of recall and most often used brands, are showing an uptick.

Speaker #2: So, investing in those is absolutely important. We understand that these are there, and, like we said, we are committed to delivering top-line growth along with healthy, sustainable margins.

Rakshit Hargave: Like we said, we are committed to deliver top-line growth along with healthy, sustainable margins, and that is what we will target to do.

Speaker #2: And that is what we will target to do.

Speaker #3: Understood. No, I was essentially trying to understand the mitigating factors or price increases that you would take to tide over the RM and fuel costs.

Mihir Shah: Understood. I was essentially trying to understand the mitigating factors or price increases that you would take to tide over the RM and fuel cost.

Speaker #3: So or also maybe the.

Rakshit Hargave: Okay.

Mihir Shah: Also maybe.

Speaker #2: No, let me rephrase. So yes, we did take, but you see, many of our price increases are actually what you call shrinkflation. So, in the ₹5 and ₹10 segments, the consumer end price doesn't change, but the content of what we give to them actually goes down.

Rakshit Hargave: Sameer, let me tell you. Yes, we did take. You see, many of our price increases is actually what you call is shrinkflation. In the INR 5 and INR 10 segment, the end consumer price doesn't change, but the content of what we give to them actually goes down. If you ask me, what have we done in the quarter, I think at best, we have been able to mitigate half of the inflation through price increases. The other half, we have not been able to.

Speaker #2: So, if you ask me what we have done in the quarter, I think at best we have been able to mitigate half of the inflation through price increases.

Speaker #2: The other half, we have not been able to.

Speaker #3: Thank you. Mr. Shah, please rejoin the queue for more questions. A reminder to all participants: please limit yourself to two questions. The next question is from Avnish Rai with Nuwama.

Operator: Thank you. Mr. Shah, please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Avnish Rai with Nuvama. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Yeah, thank you. And congrats on the very good numbers. My first question is on slide 11. So, Croissant—are you now the number one in the country?

Avnish Rai: Yeah, thank you, and congrats on very good numbers. My first question is on slide 11. Croissant, are you now the number one in the country? Because Bonn also is doing quite well. You had given an earlier number of around 100 crores ARR. With this 30% kind of growth and overall buoyancy, what would be the ARR currently? Will Croissant margin be margin accretive to the company at the gross margin levels?

Speaker #4: Because Bali also is doing quite well. And you had given an earlier number of around ₹100 crore ARR. With this 30% kind of growth and overall buoyancy, what would be the ARR currently?

Speaker #4: And will Croissant margin be margin accretive to the company at the gross margin level?

Speaker #2: So Avnish, I think if you are quoting a number of ₹100 crore ARR, I think you should just double it. And it’s growing at 30% plus.

Rakshit Hargave: Avnish, I think if you're quoting a number of 100 crore ARR, I think you should just double it's growing at 30% plus. The overall margin that we are making in Croissant is equal or slightly accretive to the company margin.

Speaker #2: And the overall margin that we are making in Croissant is kind of equal to or slightly accretive to the company margin.

Speaker #4: Understood. Now, coming to the slide where you have given key states versus other states, two years back, key states were growing in line with other states, and then started underperforming.

Avnish Rai: Understood. Now, coming to the slide where you have given key states versus other states. Two years back, key states was growing in line with other states, then started underperforming. Now the gap has reduced. What will be your expectation? Will this grow at similar level or even it can grow faster? On the other channels which you have given, basically e-commerce, Q-commerce, et cetera, the earlier number you had given was 6% of the sales comes from e-commerce, out of that, around 70% is Q-commerce. Any update on those numbers?

Speaker #4: And now the gap has reduced. What will be your expectation—will this grow at a similar level, or could it grow even faster? And on the other channels you have mentioned, basically e-commerce, quick commerce, et cetera—the earlier number you had given was 6% of the sales comes from e-commerce.

Speaker #4: And out of that, around 70% is quick commerce. Any update on those numbers?

Speaker #2: So, Avnish, I think I will need to give you a small clarification. As I understand, two years back, when we used to use the term 'focus states,' these focus states were generally the states which were from the Hindi belt.

Rakshit Hargave: Avnish, I think, I will need to give you a small clarification. As I understand, two years back when we used to use the term focus states, these focus states were generally the states which were from the Hindi belt, where Britannia was not the market leader. Hence, there were initiatives which are continuing even today to how to capture share from competition. When I'm using the word key states this time, I'm actually talking about the set of states which are our largest and most profitable. By and large, the highest in terms of net sales, but a mix also where we sell profitable portfolio. The context is different. These six states, or whatever number of states that we are talking about, is the number that I have given on the slide. Okay?

Speaker #2: Where Britannia was not the market leader—and hence, they were initially—yeah, and hence there were initiatives, which are continuing even today, to look at how to capture share from the competition.

Speaker #2: When I'm using the word 'key states' this time, I'm actually talking about the set of states which are our largest and most profitable. So, by and large, the highest in terms of net sales, but also a mix where we sell a profitable portfolio.

Speaker #2: So the context is different. So, these six states, or whatever number of states that we are talking about, is the number that I have given on the slide.

Speaker #2: Okay.

Speaker #4: Just—yeah, just a clarification. I'm quoting from that same slide. So, it was growing in line in Q1 '25, and then the gap came. And does this include East India also?

Avnish Rai: Yeah, just for clarification.

Rakshit Hargave: Yeah.

Avnish Rai: I am quoting from that same slide. It was growing in line in Q1 2025, and then the gap came. Does this include Eastern India also? Because I think that's very large for you. Bihar, et cetera, is very large for you, I think Bengal also. Any update also if you can give on Eastern India, Bengal, et cetera, because I think there was some market share lost there.

Speaker #4: Because I think that's very large for you. Bihar, et cetera, is very large for you. I think Bengal also. Any update also, if you can give, on Eastern India, Bengal, et cetera?

Speaker #4: Because I think there was some market share loss there.

Speaker #2: No, no. So what I can tell you is that this denomination of key states that we are sharing is, I think, for the first time.

Rakshit Hargave: No. What I can tell you is that, this denomination of key states that we are sharing is, I think for the first time. We have not shared this denomination because it's a part of our. If you see the tip of Q1 2025 in the chart that we have shown for the green states, you will see that the orange state was equal to the green state, and now both of them have actually moved ahead. The green state, which is our key states, has also moved ahead. As far as your question is on Eastern India, Eastern India is doing well for us. We are growing in double digits. Obviously, Eastern India includes Bengal, which is a very large market for us. You also had this question on e-commerce and Q-commerce.

Speaker #2: We have not shared this denomination because it's a part of our—so if you see, if you see the tip of Q1 '25 in the chart that we have shown for the green states, you will see that the orange state was equal to the green state.

Speaker #2: And now, both of them have actually moved ahead. And the green state, which is one of our key states, has also moved ahead. As far as your question on Eastern India, Eastern India is doing well for us.

Speaker #2: And we are growing in double digits. Obviously, Eastern India includes Bengal, which is a very large market for us. You also have this question on e-commerce and Q-commerce.

Speaker #2: So, like I said, Q-com is now literally 80% to 85% of overall e-commerce. And for us, it is growing in very, very healthy double digits.

Rakshit Hargave: Like I said, Q com is now literally 80% to 85% of overall e-commerce. For us, it is growing in very, very healthy double digits. Like I said, the investment and focus with even sharpened portfolios will continue. You will see more things in the near future.

Speaker #2: And like I said, the investment and focus, with even sharpened portfolios, will continue. And you will see more things in the near future.

Speaker #4: Sure. Thanks. That's all from me. Thank you.

Avnish Rai: Sure, thanks. That's all, Sameer. Thank you.

Speaker #3: Thank you. Next question comes from Nithin with HDFC Securities. Please go ahead.

Operator: Thank you. Next question comes from the line of Nitin with HDFC Securities. Please go ahead.

Speaker #5: Oh, thanks for taking my question. My first question pertains to the execution team, with multiple execution team shifts following your appointment. Are we done with the changes, or should we expect some further enhancements?

[Analyst] (HDFC Securities): Thanks for taking my question. My first question pertains to the execution team. With multiple execution team shifts following your appointment, are we done with the changes or should we expect some further enhancements? Additionally, could you comment on the phantom stock accounting impact for this quarter? That's the first question.

Speaker #5: Additionally, could you comment on the phantom stock accounting impact for this quarter? That's the first question.

Speaker #2: Yeah. So, when you said "multiple execution teams," can you clarify what you mean by that?

Rakshit Hargave: When you said multiple execution team, can you clarify what you mean by that?

Speaker #5: No, so multiple appointments, like Shubhashi Basu got Chief Business Officer, okay. So you were talking about the management team, huh? Yeah, yeah. Management team.

[Analyst] (HDFC Securities): multiple appointments like Subhashis Basu got Chief Business Officer

Rakshit Hargave: You are talking about the management team, huh?

[Analyst] (HDFC Securities): Management team.

Speaker #2: Okay. No, so I think the management team is more or less over. You would also have seen that a gentleman has joined us to head our Strategy and Corporate Development earlier this week.

Rakshit Hargave: I think the management team is more or less over. You would also seen that a gentleman has joined us to head our strategy and corporate development earlier this week. From that point of view, all the changes are done. If there are any other changes which will happen more in the course of normal business, where if somebody is retiring, he will be replaced, et cetera. Otherwise, from a team construct point of view, the team is now complete. You had a question on something else.

Speaker #2: From that point of view, all the changes are done. If there are many if there are any other changes which happen, which will happen more in the course of normal business, where if somebody is retiring, he will be replaced, et cetera.

Speaker #2: But otherwise, from a team construct point of view, the team is now complete. You had a question on some.

Speaker #5: Phantom stock accounting impact for this quarter.

[Analyst] (HDFC Securities): Phantom stock accounting impact for this quarter.

Speaker #2: If you can clarify that, maybe the phantom-related.

Rakshit Hargave: If you can clarify that maybe.

[Analyst] (HDFC Securities): No, the phantom related impact was INR 52 crore last year.

Speaker #5: Impact was ₹52 crore last year. So, just wanted to see.

Speaker #2: Okay, okay. You're talking about phantom stock. Oh, that's hardly about one crore, is what I'm told by Finance, for the quarter.

Rakshit Hargave: Okay. You're talking about phantom stock. Oh, that's hardly about INR 1 CR, is what I'm told by finance.

Operator: For the quarter.

Speaker #5: Yeah, thank you. And my second question is: Britannia has always aspired to be a total food company. So, any thoughts around new category introduction? Any thoughts around M&A?

Rakshit Hargave: For the quarter.

[Analyst] (HDFC Securities): Thank you. My second question is, Britannia always aspires to be a total food company. Any thoughts around new category introduction? Any thoughts around M&A? Also, if you can share your thoughts around in the past, we have tried out salty snacks and protein bar launch.

Speaker #5: Also, if you can share your thoughts around—in the past, we have tried out salty snacks and a protein bar launch.

Speaker #2: So, you know, if you go back to the slide which talks about our strategic priorities, you will see on the third pillar we are talking about future platforms.

Rakshit Hargave: If you go back to the slide, which talks about our strategic priorities, you will see on the third pillar, we are talking about future platforms. I think in one of the earlier calls, I had shared that how we will develop a strong platform also for health and wellness and also to leverage the adjacencies that we have. That obviously remains. There is work at an internal level happening in the company, and the company is extremely committed and serious to expand its portfolio beyond the kind of bakery product that we have today. You have to wait and watch. The company is committed and internal teams are already working on that.

Speaker #2: And I think in one of the earlier calls, I had shared that how we will develop a strong platform also for health and wellness, and also for, you know, to leverage the adjacencies that we have.

Speaker #2: So, obviously, there is work happening at an internal level in the company. The company is extremely committed and serious about expanding its portfolio beyond the kind of bakery products that we have today.

Speaker #2: So you have to wait and watch. The company is committed, and internal teams are already working on that.

Speaker #5: Sure, sir. Thank you, and also...

[Analyst] (HDFC Securities): Sure, sir. Thank you and

Speaker #2: Thank you.

Rakshit Hargave: Thank you.

Speaker #3: Thank you. Next question comes on the line of Vinay Shukla with Philip Capital India.

Operator: Thank you. Next question comes from the line of Vinay Shukla with PhillipCapital India.

Speaker #5: Oh, thanks for the opportunity. That's a great question on the GT channel. So, what structural changes are they implementing in the GT channel to observe the complexity of the operator?

Vinay Shukla: Thanks for the opportunity. The quick question on GT channel. What structural changes are we implementing in GT channel to offset the competition impact, particularly in Hindi speaking market, which is maybe 15% of the business and the eastern region which might be close to 20%? Could you please highlight what exactly we are doing? I do understand that we are doing the localized marketing with providing the BTL support and hiring the right talent for the right market. Other than this, would you like to highlight any other efforts we are taking?

Speaker #3: Sorry for interrupting. Mr. Shukla, just give me a moment. Speakers, the disturbance is coming from your line, from the management line. So just make sure that when this participant is speaking, you are muted from your end.

Speaker #3: And then speak. Thank you. Mr. Shukla, please go ahead. Thank you.

Speaker #5: Yeah, thank you. So, the question was on the GT channel. I just wanted to understand what structural changes we are implementing in the GT channel to offset the impact of competition?

Speaker #5: So, particularly in the Hindi-speaking market, which is maybe 50% of the business, and the Eastern region, which might be close to 20%. So could you please highlight what exactly we are doing?

Speaker #5: So I do understand that we are doing localized marketing by providing BTL support and hiring the right talent for the right market.

Speaker #5: Other than this, would you like to highlight any other efforts we are taking?

Speaker #2: Yeah, so let me answer this at two levels. From a sales organization point of view, yes, I think there were certain markets where we needed to add some headcount, which we have done.

Rakshit Hargave: Yeah. Let me answer this at two levels. From a sales organization point of view, yes, I think there were certain markets where we needed to add some headcount, which we have done. Apart from that, the structure of the distributor who serves what we call is the rural dealer or the sub-stockist, that structure continues. We have also taken an exercise where we are trying to convert some of the sub-distributors into direct distributors because we've certain advantage there, and we have also done that. Fundamentally, I'll tell you where the change has been brought in.

Speaker #2: But apart from that, the structure of the distributor, the distributor who serves what we call the rural dealer or the sub-stockist, that structure continues.

Speaker #2: We have also taken an initiative where we are trying to convert some of the sub-distributors into direct distributors, because we see certain advantages there. And we have also done that.

Speaker #2: But fundamentally, I'll tell you where the change has been brought in. The change has been brought in in terms of the target portfolio, the empowerment that has been given to the regional teams, the focused media spend and the influencer spend, and the number of local regional influencers that we are putting, along with product innovation which is happening specifically for certain clusters of the Indian market.

Rakshit Hargave: The change has been brought in terms of the target portfolio, the empowerment that has been given to the regional teams, the focused media spend, the influencer spend, and the number of local regional influencers that we are putting, along with product innovation, which is happening specifically for certain clusters of the Indian market. While the overall skeleton of the GT team and the GT structure is not going to change, but the way they act and behave and the way they are being empowered, helped by marketing and local activation and product portfolio, is undergoing a change which is now causing the impact.

Speaker #2: So while the overall skeleton of the GT team and the GT structure is not going to change, the way they act and behave, and the way they are being empowered—helped by marketing and local activation and product portfolio—is undergoing a change, which is now causing the impact.

Speaker #2: So just to go back, if you saw the innovation on the product that we have done for Tamil Nadu on Milk Bikis, it is a glaring example of how you can pick up an existing product which does very well and is a legacy brand, but how do you bring it to, like, a double-digit growth by creating consumer excitement focused on the state of Tamil Nadu.

Rakshit Hargave: Just to go back, if you saw the innovation on the product that we have done for Tamil Nadu on Milk Bikis, is a glaring example of how you can pick up an existing product which does very well and is a legacy brand. How do you bring it to a double-digit growth by creating consumer excitement focused on the state of TN. You will have similar actions coming across different locations where there is better collaboration between sales and marketing to be able to deliver these kind of initiatives.

Speaker #2: So you will have similar actions coming across different locations, where there is better collaboration between sales and marketing to be able to deliver these kinds of initiatives.

Speaker #5: Okay, just a follow-up. Sir, which phase is better than your internal expectations, and which ones are still lagging behind? Secondly, I just wanted to understand what percentage of the sales from the new launches come as a percentage of total sales for the state only, excluding the non-district portfolio.

Vinay Shukla: Okay. Just a follow-up on sir, which sales are performing better than your internal expectation, and which ones are still lagging behind? Secondly, sir, just wanted to understand that what percentage of the sales from the new launch sales coming as a percentage of total sales for this quarter, not excluding the non-distributable portfolio? Can you please give a percentage of sales from new launches?

Speaker #5: Can you please give a percentage of sales for new launches?

Speaker #2: So, can you just repeat your first question again, and then do the second one separately? Because I think there was some disturbance on the line.

Rakshit Hargave: Sir, can you just repeat your first question again and then do the second one separately because I think there was some disturbance on the line.

Speaker #5: Yeah. So, which states are performing better than your internal expectations, and which ones are still lagging behind? I believe Bihar will be the performing state.

Vinay Shukla: Yeah. Which states are performing better than your internal expectation, and which ones are still lagging behind? I believe Bihar would be the performing state. Bihar, Rajasthan, and UP.

Speaker #5: Bihar and West Bengal, then UP.

Speaker #2: So, you know, I'm not going to get into state-wise details, but we are seeing healthy growth across many, many states. And obviously, there are certain states which are doing extremely well.

Rakshit Hargave: I'm not going to get into state-wise details, but we are seeing healthy growth across many, many states. Obviously there are certain states which are doing extremely well. There are some states which are a bit behind, but there is no state which is behind in the sense that it is not growing. I think it is for us to help drive the states which have the momentum even faster, and how do we start to get healthy growth in states which are growing slowly. Bihar, as you specifically pointed out, is a very strong market for us. Yes, we continue to do well there. In Bihar, we also launched the variant of Mari, which is called Doodh Mari, focused on those markets, which has got a very healthy response. What was your second question?

Speaker #2: There are some states which are a bit behind, but there is no state which is behind in the sense that it is not growing.

Speaker #2: So I think it is for us to help drive the states which have the momentum even faster, and how do we start to get healthy growth in states which are growing slowly.

Speaker #2: Bihar, as you specifically pointed out, is a very strong market for us. And yes, we continue to do well there. In Bihar, we also launched the variant of Marie, which is called Doodh Marie.

Speaker #2: You know, focused on those markets, which have got a very healthy response. What was your second question?

Speaker #5: New launches?

Vinay Shukla: New launches contribution for

Rakshit Hargave: I am still not able to gauge your question in terms of what you want, but if your answer is the composition of sales, that is more or less the same.

Speaker #2: So, you know, I'm still not able to list your question in terms of what you want, but if your answer is the composition of sales, that is more or less the same.

Speaker #5: Okay. The last question on the non-district portfolio. So the revenue contribution from the non-district portfolio has remained at around 25%. So is this because the performance of the individual categories tends to be offset by the other category?

Vinay Shukla: Okay. The last question on the non-biscuit portfolio. The revenue contribution from the non-biscuit portfolio has remained range-bound at around 25%. Is this because the performance of the individual categories tends to be offset by another category? Just wanted to understand, by when should we expect all the non-biscuit portfolio to deliver healthy top-line growth?

Speaker #5: So, just wanted to understand, by when should we expect the entire non-district portfolio to deliver healthy, growth-based performance?

Speaker #2: So okay, sorry. Could you please go to the slide in the business which talks about other adjacency businesses? You will see that cake, rusk, and wafers delivered double-digit growth.

Rakshit Hargave: Okay, sorry. You please go to the slide in the business, which talks about other adjacency business. You will see that cake, rusk, and wafers deliver double-digit growth. Okay? That is growing faster than the average. In our dairy business, also grew at double digits, and our ghee business there, along with cheese slices, is doing very well. If you ask me the question, although the proportion is less, but at an overall level, the non-biscuit portfolio has actually grown in double digits also. Is that clear?

Speaker #2: Okay? So, that is growing faster than the average. Also, our dairy business grew at double digits. And our ghee business there, along with cheese slices, is doing very well.

Speaker #2: So if you ask me the question, although the proportion is less, at an overall level, the non-biscuit portfolio has actually grown in double digits also.

Speaker #2: Is that clear?

Speaker #1: Thank you. Mr. Shukla, please rejoin the queue for more questions. The next question comes from Avi Mehta with Macquarie Capital. Please go ahead.

Operator: Thank you. Mr. Shukla, please return to queue for more questions. Next question comes from the line of Avi Mehta with Macquarie Capital. Please go ahead.

Speaker #3: Yeah. Hi team. Just two questions and I'll put them up front. As we focus on driving portfolio diversification and the demand environment remains healthy, do you see the ability for the FY27 portfolio to grow operating profit or EBITDA ahead of sales growth, similar to what we saw in Q1?

Avi Mehta: Yeah. Hi, team. Just two questions, and I'll put them upfront. As we focus on driving portfolio diversification and demand environment is remaining healthy, do you see for the full year FY27 an ability to grow operating profit or EBITDA ahead of sales growth, similar to what we saw in Q1? The second bit, just a bookkeeping, if you could kind of share what was the volume growth in Q1. Thank you.

Speaker #3: And the second bit, just a bookkeeping item: if you could kind of share what was the volume growth in Q1. Thank you.

Speaker #2: Okay. So the answer to the first question is that while the demand environment is strong, I think it's only one quarter which has gone by, and we see that the trend is good.

Rakshit Hargave: Okay. The answer to the first question is that while the demand environment is strong, I think it's only one quarter which has gone by, and we see that the trend is good. Whether this holds good for the rest of the year, we will have to see. Internally, the team is very confident that the plans that we have and the focus that we have and the momentum that we have is taking us in the right direction. Okay? Now, if there are uncertain events which happen, which are not under our control, I won't be able to comment on that. As a business, we are confident of looking at a good year. What was your second question?

Speaker #2: Whether this holds good for the rest of the year, we will have to see. But internally, the team is very confident that the plans that we have, the focus that we have, and the momentum that we have are taking us in the right direction.

Speaker #2: Okay? Now, if there are uncertain events which happen that are not under our control, I won't be able to comment on that. But as a business, we are confident of looking at a good year.

Speaker #2: And what was your second question?

Speaker #3: Just—sorry, one—before I ask the second question, just to clarify: When you say a good year, do you mean, you know, how would you classify or quantify—what do you mean by that?

Avi Mehta: One. Before the second question, could you just clarify, when you say a good year, how could you classify or quantify? What do you mean by that? Is it like volume will be the key metric for you to define good year? Just your thoughts on that would be helpful. The second question was just a data keeping on what the volume growth for the quarter was. That's it.

Speaker #3: Is it like volume will be the key metric for you to define a good year? Is it, you know, just your thoughts on that would be helpful.

Speaker #3: And the second question was just for record-keeping on what the volume growth for the quarter was. That's it.

Speaker #2: So, okay. Let me give you the volume growth that we had for the quarter—it was close to 9%, which, in any respect, is good volume growth.

Rakshit Hargave: Okay. Let me give you. The volume growth that we had for the quarter was close to 9%, which in any respect is a good volume growth. Now, how do we define a good year? You guys have seen businesses for so long. You would also be talking about the same thing as us. If we believe that the year is good, it would mean that our triangle, as we say, virtuous triangle of volume, value, and profitability, should all fall in a healthy range, as we have been doing in the past. Okay? One should not overtake the other. While we will deliver volume, value, but we should also deliver the margin, not at the cost of one.

Speaker #2: Now, how do we define a good year? You know, you guys have seen businesses for so long. You would also be talking about the same thing as us.

Speaker #2: But if we believe that the year is good, it would mean that our triangle—as we say, you know, the virtuous triangle of volume, value, and profitability—should all fall in a healthy range.

Speaker #2: As we have been doing in the past, okay? One should not overtake the other. So, while we will deliver volume and value, we should also deliver the margin.

Speaker #2: Not at the cost of one another.

Speaker #3: Perfect. Thank you very much, sir.

Avi Mehta: Perfect. Thank you very much.

Speaker #1: Thank you. Next question comes from the line of Sitesh Deshmukh with IFL Capital. Please go ahead.

Operator: Thank you. Next question comes from the line of Siddhesh Deshmukh with IIFL Capital. Please go ahead.

Speaker #5: Yeah, hi, this is Percy Panthaki here. I just wanted to ask about the margins—was there any benefit from older inventory that you had this quarter?

Percy Panthaki: Yeah. Hi, this is Percy Panthaki here. I just wanted to ask on the margins, was there any benefit of older inventory which you had this quarter, and therefore you expect sort of Q2 margins to be a little weaker? A subset of this question is, if input costs remain where they are today, are you confident of maintaining full year FY27 EBITDA margins at least the same level as FY26?

Speaker #5: And therefore, you expect sort of Q2 margins to be a little weaker? And a subset of this question is: if input costs remain where they are today, are you confident of maintaining full-year FY27 EBITDA margins at at least the same level as FY26?

Speaker #2: So, Percy, thank you for asking. The answer to the first question is no—there was nothing of that nature. Now, the second question is interesting.

Rakshit Hargave: Percy, thank you for asking. The answer to the first question is no. There was nothing of that nature. The second question is interesting. If the input costs remain, whether we will be able to deliver. Let's go back to the last question that we said. I think the input costs at the moment are at a higher level compared to what they were in February. We will have to manage. Like we said, we will have to manage between value, volume, and margin, and which we will do. How do we exit the year is something that we will have to see. Internally, as a business, we are quite confident that we are able to keep the levers in check.

Speaker #2: If the input cost remains, will we be able to deliver? So, you know, let's just go back to the last question that we discussed.

Speaker #2: I think the input costs at the moment are at a higher level compared to what they were in February, so we will have to manage.

Speaker #2: Like we said, we will have to manage between value, volume, and margin, which we will do. So, how do we exit the year?

Speaker #2: That is something we will have to see. But internally, as a business, we are quite confident that we are able to keep the levers in check.

Speaker #5: Understood. Second question is on PLI. What is the amount of PLI that you will book in FY27? And, since that will go away in FY28, will it hit the bottom line?

Percy Panthaki: Understood. Second question is on PLI. What is the amount of PLI that you will book in FY27? Since that will go away in FY28, will it hit the bottom line to that extent? Would you fully be able to mitigate the impact of that through some other measures?

Speaker #5: To that extent, or would you be fully able to mitigate the impact of that through some other measures?

Speaker #2: So we didn't book any PLI incentive even in 2025-26, okay? And nor have we booked anything in the current year because we have not been able to achieve the threshold growth that they had prescribed under the scheme.

N. Venkataraman: We didn't book any PLI incentive even in 2025/2026. Okay? Nor have we booked anything in the current year because we have not been able to achieve the threshold growth that they had prescribed under the scheme. There's been no amount that's been recognized the last financial year and in Q1 of the current year.

Speaker #2: So there's been no amount that's been recognized in the last financial year and in the first quarter of the current year.

Speaker #5: Okay, got it. That's all from me. Thanks, and all the best.

Percy Panthaki: Okay, got it. That's all from me. Thanks an all.

Speaker #1: Thank you.

Operator: Thank you. Next question comes from the line of Aditya Soman from CLSA. Please go ahead.

Speaker #2: Thank you.

Speaker #1: The next question comes from the line of Aditya Soman from CLSA. Please go ahead.

Speaker #3: Hi, good morning. Just one question—in terms of adjacent categories on e-commerce, and especially on quick commerce, do you have any sense if you're getting a lot more traction for these categories compared to some of your competitors or peer group companies?

Aditya Soman: Hi, good morning. Just one question. In terms of adjacent categories on e-commerce and especially on Q-commerce, any sense on if you're getting a lot more traction for these categories from some of your competitors or peer group companies? We've also heard about them launching sort of exclusive products for these channels. Is that something that's being extensively done at Britannia or something you plan to accelerate further? Thanks.

Speaker #3: We've also heard about them launching sort of exclusive products for these channels. Is that something that's being extensively done at Britannia or something you plan to accelerate further?

Speaker #3: Thanks.

Speaker #2: Absolutely, yes. You will see it in the near future. So, there is traction in these categories, as you could see. These are also relatively new-age, more impulsive.

Rakshit Hargave: Absolutely yes. You will see it in the near future. There is traction in these categories, as you could see. These are also relatively new age, more impulsive, and we are also quickly working on doing something which is focused on this channel.

Speaker #2: And we are also quickly working on doing something that is focused on this channel.

Speaker #3: And just a quick follow-up on that. So, in terms of the mix today, would it be vastly different in terms of adjacent versus non-adjacent, say, on the modern channels versus traditional trade?

Operator 1: Just a quick follow-up on that. In terms of the mix today, would it be vastly different in terms of adjacent versus non-adjacent on, say, the modern channels versus traditional trade?

Speaker #2: You know, there is a fundamental difference. A vast value of what we sell in GT sells at 5 rupee and 10 rupee. The contribution of 5 rupee and 10 rupee on e-commerce is QCOM is very negligible.

Rakshit Hargave: There is a fundamental difference. A vast value of what we sell in GT sells at ₹5 and ₹10. The contribution of ₹5 and ₹10 on e-commerce is Q-commerce is very negligible. Hence, what you end up selling is firstly the larger packs, the more impulse consumption, adjacency categories, and some of our best sellers. The construct of the sales on this channel is a bit different, as you could understand.

Speaker #2: And hence, what you end up selling is, firstly, the larger packs and the more impulse consumption adjacency categories, and some of our best sellers. So the construct of the sales on this channel is a bit different, as you could understand.

Speaker #3: Fair point. But from a category perspective, any differences? So, for example, biscuits and...

Operator 1: Fair point.

Rakshit Hargave: Fair point.

Operator 1: With respect to any differences? For example, biscuits and

Speaker #2: For example, biscuits and... So yeah, it could be that we sell maybe—the proportion of non-biscuits that we sell, especially items like rusk, which goes with morning tea, croissant, you know, which is also more impulse consumption.

Rakshit Hargave: Yeah. It could be that we sell maybe the proportion of non-biscuits that we sell, especially items like rusk, which goes with morning tea, Croissant, which is also more impulse consumption, products like Jim Jam, and Little Hearts, which are favorite with young Gen Z teenagers. You see much higher traction for these categories on e-commerce. The reason why these are also growing in strong double digits is also because e-commerce is a big channel contributor for them.

Speaker #2: Products like Jim Jam and Little Hearts, which are favorites with young Gen Z teenagers, you see much higher traction for these categories on e-commerce.

Speaker #2: And you know, the reason why these are also growing in strong double digits is also because e-commerce is a big channel contributor for them.

Operator 1: Very clear. Thanks a lot.

Speaker #2: Very clear.

Speaker #1: Thank you. Next question comes from the line of Arnab Mitra with Goldman Sachs. Please go ahead.

Operator: Thank you. Next question comes from the line of Arnab Mitra with Goldman Sachs. Please go ahead.

Speaker #3: Yeah, hi. My first question was on your volume growth number of 9%. That essentially implies you had only 1% pricing in the quarter, which seems actually lower than what you had last quarter.

Arnab Mitra: Hi. My first question was on your volume growth number of 9%. That essentially implies you had only 1% pricing in the quarter, which seems actually lower than what you had last quarter. Just wanted to understand, have you put in more pricing through the quarter? Should we expect the pricing growth to be higher going forward, or you expect this level of pricing growth to be only there?

Speaker #3: So, just wanted to understand — have you put in more pricing through the quarter? Should we expect the pricing growth to be higher going forward?

Speaker #3: Or do you expect this level of pricing growth to be only there?

Speaker #2: Yeah, so like we said, our pricing growth which we put in the quarter was what we call shrinkflation, and that takes a bit of time to execute.

Rakshit Hargave: Like we said, our pricing growth, which we put in the quarter was what we call is shrinkflation, and that takes a bit of time to execute, because you need machinery changes and packaging changes. On which Britannia has a lot of expertise, because this is something which all biscuit companies need to do. Going ahead in the quarter, yes, you will see something more coming in. If the overall impact was 1%, you will probably see maybe another 1.5% to 2% coming in.

Speaker #2: Because, you know, you need machinery changes and packaging changes, on which Britannia has a lot of expertise. Because this is something which all biscuit companies need to do.

Speaker #2: But going ahead in the quarter, yes, you will see something more coming in. So if the overall impact was 1%, you would probably see maybe another 1.5 to 2% coming in.

Speaker #3: Got it. My second question was again on this mid-teens exit growth for the last quarter. I just wanted to double-click on this, because with the dual pricing issue getting over, the main challenge I think you were facing was also on the wholesale channel.

Arnab Mitra: Got it. My second question was on, again, this mid-teens exit growth for the last quarter. Just wanted to double-click on this because with the dual pricing issue getting over, the main challenge I think you were facing was also on the wholesale channel. Therefore, is it possible that some of the acceleration is coming because of a natural restocking in the channel? Or are you seeing recovery even in, let's say, mainstream direct coverage or modern trade, e-commerce kind of channels versus what you were growing last quarter?

Speaker #3: And therefore, is it possible that some of the acceleration is coming because of a natural restocking in the channel? Or are you seeing recovery even in, let's say, mainstream direct coverage or modern trade, e-commerce kind of channels versus what you were growing last quarter?

Speaker #2: No, so I don't think it's because of stocking that we are building in those channels. The wholesale channel and the rural channel, where the dual pricing had an impact, is now over.

Rakshit Hargave: No. I don't think it's because of stocking that we are building in those channels. The wholesale channel and the rural channel where the dual pricing had an impact is now over. We see that the throughput, both in terms of selling in and selling out, is very good. Our stock doesn't last long at the retail shelves, even of wholesalers. I think it's fairly clean. We don't see any of this as a result of any inventory buildup. It is a result of demand buildup and the fact that the retailers who had kind of shied away a bit have come back to us in strong numbers.

Speaker #2: And we see that the throughput, both in terms of sell-in and sell-out, is very good. You know, our stock doesn't last long on the retail shelves.

Speaker #2: Even of wholesalers. So I think it's fairly clean. We don't see any of this as a result of any inventory buildup. It is a result of demand buildup, and the fact that the retailers who had kind of shied away a bit have come back to us in strong numbers.

Speaker #3: Got it. That's it from my side. All the best.

Arnab Mitra: Got it. That's it from my side. All the best.

Speaker #1: Thank you. The next question comes from the line of Kunal Vora with BNP Paribas. Please go ahead.

Operator: Thank you. Next question comes from the line of Kunal Vora with BNP Paribas. Please go ahead.

Speaker #4: Yeah. Thanks for the opportunity. First one is, there have been quite a few tailwinds for the category and you with GST rate cut and organized to organize price hikes which are now being taken general recovery in consumption.

Kunal Vora: Yeah, thanks for the opportunity. First one is, there have been quite a few tailwinds for the category and you with GST rate cut, unorganized to organized, price hikes, which are now being taken, and general recovery in consumption. Is it fair to say that the benefits are not fully visible due to dual pricing issue, or was there more to it? Does it mean that unlike some of the peers who've already seen the benefit of GST rate cut, for you, the benefits will be visible going forward?

Speaker #4: Is it fair to say that the benefits are not fully visible due to the dual pricing issue, or was there more to it? And does it mean that, unlike some of the peers who have already seen the benefits of the GST rate cut, for you the benefits will be visible going forward?

Speaker #2: So, Kunal, you know, I think if you take a look at Britannia's portfolio—and, for that matter, any large biscuit company—a significant portion of what we sell is sold at ₹5 and ₹10.

Rakshit Hargave: Kunal, I think if you take a look at Britannia's portfolio, and for that matter, any large biscuit company, a significant portion of what we sell is sold at INR 5 and INR 10. In Britannia's algorithm, it would be upwards of 60%. When there is a GST cut, how does the consumer differentiate? The consumer is still paying INR 5 and INR 10. What he's getting is an extra or a couple of cookies more. From a consumption point of view, the elasticity of volume or the number of packs would not be visible very soon. Unlike in categories where you are selling packs at INR 100, INR 120, and INR 130, where you actually pass on the GST cut and you see a drop of INR 15, which drives demand, and you see elasticity of consumption going high.

Speaker #2: In Britannia's algorithm, you know, it would be upwards of 60%. Now, when there is a GST cut, how does the consumer differentiate? The consumer is still paying ₹5 and ₹10.

Speaker #2: What he's getting is an extra, or a couple of, cookies more. So from a consumption point of view, the elasticity of volume, or the number of packs, would not be visible very soon.

Speaker #2: Unlike in categories where you are selling packs at ₹100, ₹120, and ₹130, where you actually pass on the GST cut and you see a drop of ₹15, which drives demand.

Speaker #2: And, you know, you see elasticity of consumption going high. So, to say that the GST impact on Britannia is going to be instantaneous—I think it is going to take some time.

Rakshit Hargave: To say that the GST impact on Britannia is going to be instantaneous, I think it is going to take some time. The real consumer impact will happen gradually, but it is not going to be as pronounced as you would see in some other packaged good companies, where the impact of price drop is visible on the shelf, which encourages people to buy more. Yes, we have taken some price drops on our larger packs, but the contribution of that is minimal. Many times, because they are in modern trade and e-commerce with promotions, the consumer is not able to make that comparison very clearly.

Speaker #2: So the real consumer impact will happen gradually, but it is not going to be as pronounced as you would see in some other packaged goods companies, where the impact of a price drop is visible on the shelf, which encourages people to buy more.

Speaker #2: Yes, we have taken some price drops on our larger packs, but the contribution of that is minimal. And many times, because they are in modern trade and e-commerce with promotions, the actual pricing is not—you know—the consumer is not able to make that comparison very, very clearly.

Speaker #2: Unlike in GT, where if you do a price cut on a shelf or in the modern trade, you know, there is a 100 rupee or a 200 rupee product pack, a 20 rupees or a 30 rupee price back drop is very noticeable, which we can see in our larger packs.

Rakshit Hargave: Unlike in GT, where if you do a price cut on a shelf or in the modern trade, there is an INR 100 or an INR 200 product pack, an INR 20 or an INR 30 price drop is very noticeable, which we can see in our larger packs, but our larger packs are a minority.

Speaker #2: But larger packs are a minority.

Speaker #4: Okay, okay. The second one is: How are you thinking about high-protein products? Any update on healthy-to-drink protein drinks which you are evaluating?

Kunal Vora: Okay. The second one is, how are you thinking about high protein products? Any update on ready-to-drink protein drinks, which you are evaluating? Also, you have a large dairy business. Would you explore new areas such as whey protein, Greek yogurt, high protein milk, which some of the other smaller dairies are doing? Is this a margin issue or a market size issue, or lack of confidence in investing these kind of products?

Speaker #4: Also, you have a large dairy business. Would you explore new areas such as whey protein, Greek yogurt, high-protein milk, which some of the other smaller dairies are doing?

Speaker #4: And is this a margin issue or a market size issue? Or is it a lack of confidence in these kinds of products?

Speaker #2: So, Kunal, when we talked about future platforms on health, protein is a part of the health platform. We believe that if we have to address these problems and opportunities, we have to address them at a platform level and not at a single product level.

Rakshit Hargave: Kunal, when we talked about future platforms on health, protein is a part of the health platform. We believe that if we have to address these problems and opportunities, we have to address them at a platform level and not a single product level. You will see in the near coming future how we address them at a platform level. Protein is an important platform which will get covered.

Speaker #2: So, you will see in the near future how we address them at a platform level. And protein is an important platform, which will get covered.

Kunal Vora: Okay, thank you.

Speaker #2: Okay. Thank you.

Rakshit Hargave: Okay, thank you.

Speaker #1: Thank you. Next question comes from the line of Lathika Chopra with JP Morgan. Please go ahead.

Operator: Thank you. Next question comes from the line of Latika Chopra with JPMorgan. Please go ahead.

Speaker #5: Hi, Rakshit and team. You know, many of my questions are answered. Just a few clarifications—first one, on your volume growth of 9%. Is it right to think this is the growth in the number of packs sold?

Latika Chopra: Hi, Rakshit and team. Many of my questions are answered. Just few clarifications. First one on your volume growth of 9%. Is it right to think this is the growth in number of packs sold? Is that what you meant, adjusted for inflation?

Speaker #5: Is that what you meant, Justin, regarding shrinkflation?

Speaker #2: No, this is the total tonnage growth. This is the total tonnage growth. Yes.

Rakshit Hargave: No, this is the total tonnage growth.

Latika Chopra: Okay. This is the total tonnage growth.

Rakshit Hargave: This is the total tonnage growth. Yes.

Speaker #5: Okay, okay. The second thing I wanted to check was, you know, Q2 had a low base because of, you know, the GST transition impact.

Latika Chopra: Okay. The second thing I wanted to check was, Q2 had a low base because of the GST transition impact. I was just trying, sorry for asking this, but when you comment something like mid-teens' revenue growth for the month of June, if it was for the full month, just to get the right way of thinking about how growth really behaves in the coming quarter. I just wanted to get a sense check whether this was also benefiting from a low base impact that Q2 will have going forward. That was the second clarification I wanted.

Speaker #5: And I was just trying—sorry for asking this—but, you know, when you comment something like mid-teens revenue growth for the month of June, if it was for the full month, you know, just to get the right way of thinking about how growth really behaves in the coming quarter, I just wanted to get a sense check whether this was also benefiting from a low base impact that, you know, Q2 will have going forward.

Speaker #5: So, that was the second clarification I wanted.

Speaker #2: Yeah, so Lathika, June was anyway in the last quarter, and I don't think we had a low base there. But yes, in Q2 of last year, which is July, August, September, the only month which really had a challenge because of the GST price transition, where the market was a bit shaky about buying old price products, was in the month of September.

Rakshit Hargave: Yeah. Latika, June was anyway in the last quarter, and I don't think.

Latika Chopra: Yes

Rakshit Hargave: a low base there. Yes, in Q2 of last year, which is July, August, and September, the only month which really had a challenge because of GST price transition, where market was a bit shaky about buying old price product, was in the month of September. There is going to be a base impact in September, which I think will apply to a lot of other companies also, which will apply to us also. July and August last year were pretty normal months.

Speaker #2: So there is going to be a base impact in September, which I think will apply to a lot of other companies also, and will apply to us as well.

Speaker #2: But July and August last year were pretty normal months.

Speaker #5: Understood. And any follow up. You talked about improving market shares. If you could elaborate a bit on, you know, which are the sub-segments where you're seeing that traction coming back.

Latika Chopra: Understood. You've talked about improving market shares. If you could elaborate a bit on which are the sub-segments where you're seeing that traction coming back, and also any incremental color on how should one think about growth trajectory in the overseas business now that we have seen much of the disruption is already seen last quarter and this quarter. Thank you.

Speaker #5: And also, any incremental color on how one should think about the growth trajectory in the overseas business, now that we have seen much of the disruption play out over the last quarter and this quarter.

Speaker #5: Thank you.

Speaker #2: Yeah, okay. So, on market share, what I would like to comment is that, you know, when the dual pricing was on, there was a bit of a challenge where the capture of sale value was being done on the full price, while actually the price printed on the pack was at 4.5 rupees.

Rakshit Hargave: Yeah. Okay. On market share, what I would like to comment is that when the dual pricing was on, there was a bit of challenge where the capture of sale value was being done on the full price, while actually the price printed on the pack was at INR 4.5. Okay? Britannia was anyway selling at INR 5. That was slightly challenging for us because competition was selling at INR 4.5, and our belief is that at many places it was being accounted for INR 5.

Speaker #2: Okay. And Britannia was anyway selling at ₹5, so that was slightly challenging for us because competition was selling at ₹4.50. Our belief is that, at many places, it was being accounted for as ₹5.

Speaker #2: Now that the dual pricing is over, and not only as a result of dual pricing, I think the focused interventions that we have done—the continuous presence in media, the sharpness in the sales team—we see that there is sales market share gain across a large number of biscuit categories.

Rakshit Hargave: Now that the dual pricing is over, but not only as a result of dual pricing, I think the focused interventions that we have done, the continuous presence in media, the sharpness in the sales team, we see that there is sales market share gain across large number of biscuit categories on a sequential basis, which we are seeing, and we are positive, and we will keep investing to see that keeps happening. That is the comment there. On the international business, yes, I think we have seen four months of turbulence, and there were challenges. We are hopeful that stability has happened. If you know, we have a new head of our international business who joined us two months back. Our ability to execute and come together is better, and we are expecting that our international business from this quarter will be back on a growth track.

Speaker #2: On a sequential basis, which we are seeing, we are positive. And, you know, we will keep investing to see that keeps happening. So, that is the comment there.

Speaker #2: On the international business, yes, I think we have seen four months of turbulence, and there were challenges. We are hopeful that stability has returned.

Speaker #2: As you know, we have a new head of our international business who joined us two months ago, so our ability to execute and come together is better.

Speaker #2: And we are expecting that our international business from this quarter will be back on a growth track.

Speaker #5: Understood. Thank you so much.

Latika Chopra: Understood. Thank you so much.

Speaker #1: Thank you. The next question comes from the line of Tejashah with Evan Despark Institutional Equities. Please go ahead.

Operator: Thank you. Next question comes from the line of Tejas Shah with Avendus Spark Institutional Equities. Please go ahead.

Speaker #4: Hi. Thanks.

Tejas Shah [Director of Research: Hi. Thanks. Most of the questions have been answered. Just one question. Sir, slightly longer dated. Healthy snacking has become talked about for a while, and the regulatory direction obviously seems to be kind of going in that direction. When you look at our portfolio through the lens of both relevance to the consumer and also the regulatory risk, how do you assess, and what path and how fast do you think we'll have to take to kind of de-risk from that angle, both from medium to long term?

Speaker #2: Hi. Thanks. Most of the questions.

Speaker #4: Just one question. So, for a slightly longer time, healthy snacking has been talked about for a while in the regulatory direction, kind of going in that direction.

Speaker #4: When you look at our portfolio through the lens of both relevance to the consumer and also the regulatory risk, how do you assess it, and then what path—and how fast—do you think we'll have to take to kind of de-risk from that angle, both in the medium to long term?

Speaker #2: So Tejash, I think in my very first analyst call six months back, I had indicated that creating the future platform of health and wellness is absolutely important.

Rakshit Hargave: Tejas, I think in my very first analyst call, six months back, I had indicated that creating the future platform of health and wellness is absolutely important. Let me make a few observations on that. Number one is that the demand for regular products, indulgent products, and tasty products will also keep growing because there is a huge gap in the market, and our per capita consumption is still very low. You can't discount the fact that the routine cookies, biscuits, and cakes that we talk about are not going to go out of fashion anytime soon. In fact, there is enough moat for growth there. At the same time, the reality is that the awareness at the consumer level in terms of healthy consumption is growing by leaps and bounds.

Speaker #2: So let me make a few observations on that. Number one is that the demand for regular products, indulgent products, and tasty products will also keep growing, because there is a huge gap in the market and our per capita consumption is still very low.

Speaker #2: So you can't discount the fact that the routine cookies, biscuits, and cakes that we talk about are not going to go out of fashion anytime soon.

Speaker #2: In fact, there is enough moat for growth there. At the same time, the reality is that awareness at the consumer level, in terms of healthy consumption, is growing by leaps and bounds.

Speaker #2: There are multiple channels by which he is informed, and I think Britannia is committed to developing a portfolio to be able to address that in a very smart and agile manner.

Rakshit Hargave: There are multiple channels by which he's informed, and I think Britannia is committed to develop a portfolio to be able to address that in a very smart and agile manner, and in a very fruitful manner where it addresses those consumers in a very specific way, as we are a snacking company. There is work which is happening there, but we believe that both these portfolios, the health-based portfolio, will grow parallelly, and we will have to develop a franchise which adopts that. At the same time, the core portfolio that we sell and the more indulgent and premiumization portfolio that we will develop also will keep growing. We will have to work on both those tracks. I strongly believe that it is not one at the cost of the other.

Speaker #2: And in a very fruitful manner, where it addresses those consumers in a very specific way, as we are a snacking company. So, there is work which is happening there.

Speaker #2: But we believe that both these portfolios, the health-based portfolio, will grow parallelly, and we will have to develop a franchise which adopts that.

Speaker #2: But at the same time, the core portfolio that we sell, and the more indulgent and premiumization portfolio that we will develop, will also keep growing.

Speaker #2: So, we will have to work on both those tracks. I strongly believe that it is not one at the cost of the other. But, like we said, the fact that the health portfolio is being developed is totally recognized by us.

Rakshit Hargave: Like we said, the fact that the health portfolio is being developed is totally recognized by us. The consumer trends are moving there, and we will address that market.

Speaker #2: The consumer trends are moving there, and we will address that market.

Speaker #4: Yeah, create this or create an existing platform through inorganic D2C brands. And then obviously back it up with a lot of marketing and distribution muscle that we have.

Tejas Shah [Director of Research: I find that a lot of peers have used, not necessarily channels to low-margin products and CTAs to create this or create an adjacency platform through inorganic D2C brands. Then obviously, back it up with a lot of marketing and distribution muscle that we have. First of all, are there any such opportunities in foods at large? Because in personal care, we can see because the profit pool or margin pool is different there. You will have to kind of do this organically from scratch, and there are not many assets which can be even looked at.

Speaker #4: First of all, are there any such opportunities in foods at large? Because in personal care, we can see them, because the profit pool or margin pool is different there.

Speaker #4: Or you will have to kind of do this organically from scratch. And there are not many assets which can even be looked at.

Speaker #2: So, you see, the assets available in the personal care case or the skin care case—there might be more. But there would be assets available in the food space where we operate.

Rakshit Hargave: You see, the assets available in the personal care space or the skin care space, there might be more, but there would be assets available in the food space where we operate. We have to be very careful that you always have the option of creating something organically. If you are doing something inorganically, what is the reason? The reason you would do it is either for a strong brand which already operates there, or for speed, or for a capability or a segment technology which will take time for you to develop. We are looking at that, but we will be careful if we do something to do it, which really is accretive, both from a number point of view and from a capability point of view for Britannia.

Speaker #2: But we have to be very careful that, you know, you always have the option of creating something organically. If you're doing something inorganically, what is the reason?

Speaker #2: The reason you would do it is either for a strong brand which already operates there, or for speed, or for a capability or a segment technology which will take time for you to develop.

Speaker #2: So, we are looking at that. But we will be careful; if we do something, we want to do it in a way that is really accretive, both from a numbers point of view and from a capability point of view, for Britannia.

Speaker #2: For example, we will just not buy another cookie company which is doing well, because we know that we can do that ourselves.

Rakshit Hargave: For example, we will just not buy another cookie company which is doing well, because we know that we can do that ourselves. We will be selective and smart in doing that. Like we said, inorganic agenda is there on the table, but we will be careful to evaluate that.

Speaker #2: So we'll be selective and smart in doing it. But like we said, the inorganic agenda is there on the table, but we will be careful to evaluate that.

Speaker #4: Perfect. And so, last one, if I may, on distribution: Are there any specific initiatives that you're planning in the medium term? More importantly, where do you see us under-indexed today on that front?

Tejas Shah [Director of Research: Perfect. Sir, last one, if I may, on distribution. Are there any specific initiatives that you have planned in the medium term? More importantly, where do you see as under-indexed today on that front?

Speaker #2: See, if you take a look at what are the channels we operate, we operate in e-commerce, we operate in foreign trade, and we operate in alternate channels.

Rakshit Hargave: If you take a look at what are the channels we operate. We operate in e-commerce, we operate in modern trade, we operate in alternate channels, we operate in GT. We are doing well in all of them, yes, and we also operate in institution channels like CSD, et cetera. If we look at it internally, yes, we are under-indexed in some of them where we need to improve. If we look at ourselves compared to market, we are actually strong in all the channels. I think it is for us to internally focus where we believe there is opportunity. We believe that there are opportunities in general trade also.

Speaker #2: We operate in GT, and we are doing well in all of them. Yes. We also operate in institutional channels like CFD, et cetera. If we look at it internally, yes.

Speaker #2: We are under-indexed in some of them, where we need to improve. If we look at ourselves compared to the market, we are actually strong in all the channels.

Speaker #2: So I think it is for us to internally focus where we believe there is opportunity. We believe that there are opportunities in general trade also.

Speaker #2: I think, instead of looking purely at numerical distribution, the share of handlers that we can develop, the kind of visibility that we can develop in general trade, the relative dominance that we can improve, I think it's more important for us to look at it holistically, in terms of: how do I make myself more effective in the channels where I operate? That is the question.

Rakshit Hargave: I think instead of looking purely at numerical distribution, the share of handler that we can develop, the kind of visibility that we can develop in general trade, the relative dominance that we can improve, I think it's more important for us to look at it holistically in terms of how do I make myself more effective in the channels where I operate, is the question. We are working on that. For example, modern trade is expensive. We'll be careful that we want to grow at modern trade, but we don't want to grow by diluting our margins. You will have to spend, we want to make the money that we need to make from modern trade also. Those choices are there. I think internally, we know where to work.

Speaker #2: And we are working on that. Even, for example, modern trade is expensive. So we'll be careful. You know, we want to grow in modern trade, but we don't want to grow by diluting our margins.

Speaker #2: You know, we want you to spend, but then we also want to make the money that we need to make from modern trade.

Speaker #2: So those choices are there. But I think, internally, we know where to work. But at a competitive market level, I think Britannia's position in all those segments is very strong compared to the market.

Rakshit Hargave: At a competitive market level, I think Britannia's position in all those segments is very strong compared to the market. Okay.

Speaker #4: Okay.

Speaker #1: Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question and answer session. I will now hand the conference over to Mr. Ayush Agarwal for closing remarks.

Operator: Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to Mr. Ayush Agarwal for closing comments.

Speaker #2: Thank you, everyone, for joining us on the call today. We look forward to interacting with you again in the future. Thank you, and have a good day.

Ayush Agarwal: Thank you everyone for joining us on the call today. We look forward to interacting with you again in the future. Thank you, and have a good day.

Operator: Thank you. On behalf of Britannia Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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