Britannia Industries Ltd — Q2 FY25
Britannia reported Q2 FY25 revenue of INR 4,566 crore, up 4.5% YoY, with volume growth of 8%.
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high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
64%Questions answered2Evaded / deflected11Questions audited
Partial answer
High priority
Volume growth outlook given high base and inflation; impact of downtrading.
Asked by Abneesh Roy, Nuvama Wealth
Acknowledged impact but gave no quantitative outlook or specific range.
no specific volume growth guidancequalitative only
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Question
So my question is, how do you see in terms of outlook next few quarters given base is high? ... So because of the downtrading, the volume growth number, could there be some negative shock in the next few quarters?
Varun Berry, Vice Chairman and Managing Director
So we will be careful. The next six months, nine months, we are going to be very careful about how we treat price increases, how we root for volumes, etc. So we will balance it well, and we will make sure that we do the best from a volume standpoint as well.
Evasive
High priority
RM basket inflation and profitability outlook given three of four quarters OP decline.
Asked by Abneesh Roy, Nuvama Wealth
Did not quantify inflation or provide specific profit outlook; only qualitative assurance.
no specific inflation percentage givenvague on profitability impact
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Question
Now, I wanted to understand, given the base becomes favorable, at least on the margins and profits, if you could tell us on an RM basket, how much is the inflation?
Varun Berry, Vice Chairman and Managing Director
No, so inflation is high. ... I don't think it's going to make a very large impact on our profitability. I think we will maintain the quartile that we operate in, and I don't think it's going to make a huge difference at all.
Answered
Medium priority
Missed opportunity in protein bars/healthy snacks vs peers.
Asked by Abneesh Roy, Nuvama Wealth
Confirmed existing presence and plans to scale, though no timeline given.
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Question
So now I am asking, will these become a missed opportunity for you because these four, five companies already have a well-established D2C brand, and now they can scale that up?
Varun Berry, Vice Chairman and Managing Director
We do have some bars. We've launched on a test market basis in e-commerce. ... But yeah, we haven't done much activity on those. But we will scale them up as time goes by.
Answered
High priority
Benefits and timeline for RTM 2.0 project.
Asked by Avi Mehta, Macquarie Group
Provided clear timeline and explained benefits via decile approach.
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Question
Could you help us better understand the likely benefits and, more importantly, by when do you expect these to start to materially flow?
Varun Berry, Vice Chairman and Managing Director; Ayush Agarwal, IRO
And this will take, from a training perspective, it will probably take 12-15 months to fully be embedded into our system.
Answered
High priority
Quantum of pricing actions and when volume/value growth will match.
Asked by Avi Mehta, Macquarie Group
Gave specific percentage range and timing for price increases.
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Question
Could you give us a sense on the likely quantum and the flow-through and realization that it could entail going forward?
Varun Berry, Vice Chairman and Managing Director
So there will be about 4%-5% price increase in the next two quarters. So that we'll have to take. And we will do it strategically in SKUs where we haven't taken a price for some time.
Partial answer
Medium priority
Cost of RTM 2.0 project and channel sales split.
Asked by Aditya Soman, CLSA India
Qualitative on cost and channel growth, but no quantitative split provided.
no specific cost figureno channel split percentages
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Question
What will be the cost of this project? And is that one of the reasons also that we are seeing an increase in cost? And the second question, can you just give us a sense of your sales split by channel and maybe even growth by channel if that's possible?
Varun Berry, Vice Chairman and Managing Director
The cost is there is a cost to this. ... But that's not a materially large cost which is going to impact our overall cost structure. ... So we've been seeing very good growth as far as quick commerce and e-commerce is concerned. ... It's the traditional trade, the GT part of the business, which is growing slower currently.
Answered
Low priority
Whether biscuits benefit as a cheap calorie source during inflation.
Asked by Percy Panthaki, IIFL Securities
Directly refuted the premise with clear denial.
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Question
So would you say that rather than be worried about inflation, this is sort of a good time or this is an opportunity for you, actually?
Varun Berry, Vice Chairman and Managing Director
No, no, no. There's no deflation. ... I don't know where you're getting your data from, but no, I don't think that is true.
Declined
Medium priority
Rule of thumb for price increase pass-through to sales growth.
Asked by Percy Panthaki, IIFL Securities
Explicitly declined to answer, calling the question difficult.
refused to provide any estimate
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Question
Typically, if you have a historic model or if you have any kind of insight as to how much this affects your volume, so is there like a 50% pass-through to the overall sales?
Varun Berry, Vice Chairman and Managing Director
There's no rule of thumb, Percy. It's very difficult. You're asking very difficult questions today.
Answered
High priority
Margin band outlook and reason for 45% YoY salary cost increase.
Asked by Percy Panthaki, IIFL Securities
Provided clear explanation for salary cost and margin band approach.
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Question
So how do we look at margins going ahead in terms of a band? ... And just one hygiene question on the accounts for this quarter is that salary cost is up 45% YOY. So what is the reason behind this?
Varun Berry, Vice Chairman and Managing Director
The band of margins, we try to operate in the same band, so it's not going to be dramatically different. And the salary cost is because of the stock appreciation. Phantom stocks being revalued.
Answered
Medium priority
Innovation contribution to revenue and momentum sustainability.
Asked by Mihir Shah, Nomura
Gave specific percentage (2% of revenue) and confirmed momentum.
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Question
Can you talk a bit more on the saliency of that piece? How much is it contributing to our overall revenue now? And has that momentum sustained or given the urban weakness that momentum has tapered off?
Varun Berry, Vice Chairman and Managing Director
So innovation, as we read the innovation, any product which is launched in the last 24 months is considered as innovation, and we are running at about 2% of revenue on that.
Partial answer
Medium priority
Top 10 metros contribution and rural growth vs overall volume growth.
Asked by Shirish Pardeshi, Centrum Broking
Declined to provide metro data but gave rural growth relative to urban.
no metro contribution numberrural growth given qualitatively
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Question
Do you have any quick number, the top 10 metros' contribution, and what is the growth in top 10 metros versus the overall volume growth what you have reported in 8% for the company?
Varun Berry, Vice Chairman and Managing Director; Ayush Agarwal, IRO
No, we won't have it available right away, Shirish. ... The rural growths are reasonable. I would say slightly high single-digit kind of growth. ... So rural growths are 2x of urban.
Partial answer
Medium priority
Phantom stock cost quantum in Q2 and raw material index comparison for Q3.
Asked by Amnish Aggarwal, Prabhudas Lilladher
Gave phantom stock cost but deflected raw material index question to charts.
no specific index comparison for Q3referred to charts
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Question
So how much was that quantum in 2Q? ... So on an index basis, how would be the current scenario in 3Q vis-à-vis what was in the second quarter of the year?
Varun Berry, Vice Chairman and Managing Director
That's about INR 50 crores. ... So yes, the inflation will be more than that, but if you look at the charts carefully, you will see some numbers there on the commodity side where we are indicating what the market will be.