Britannia sees volume growth accelerating on GST cuts, expects sector-wide boost
Britannia expects volume growth to accelerate to high single or double digits, aided by GST rate cuts, stabilising commodity costs, and improving consumer demand, with benefits likely extending across the FMCG sector.
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Britannia Industries is optimistic about a pickup in volume growth in the coming quarters, with Managing Director Varun Berry projecting a move from low single digits toward higher single digits and potentially even double digits driven by recent GST rate rationalisation.
In an interview with CNBC-TV18, Berry said, “GST rate rationalisation is a big initiative, and I do think this should create the demand scenario that the Prime Minister has envisaged for the country.” He expects revenue and volume growth to align more closely, as stable pricing and tax rationalisation reduce the historical gap created by frequent price hikes.
The FMCG major anticipates some short-term supply chain adjustments as the new tax regime takes effect. Stocks at factories, warehouses, distributors, and packaging inventories will need time to stabilise, with full consumer impact likely visible in the second half of the year.
Berry also noted that while consumer sentiment slowed temporarily due to heavy rainfall, the outlook remains positive, with rainfall expected to eventually boost economic activity and consumption. Commodity costs, another key margin driver, are stabilising within a manageable 3–5% range, compared with the past three years’ volatility.
While margins slipped earlier in the year, Berry expressed cautious optimism that GST rationalisation and reduced inverted taxes could improve both gross and EBITDA margins in the coming quarters. Importantly, he highlighted that the benefits of the GST cuts will not only aid Britannia but could also lift the broader FMCG sector.
