Britannia, Hindustan Unilever: How FMCG majors plan to sustain growth momentum after decent Q3 FY26

The bakery food company, Britannia Industries, reported a 17.14% year-on-year (YoY) rise in consolidated net profit to ₹682.14 crore for the quarter under review, driven by strong momentum across both the biscuits and adjacent categories.

Its revenue from operations was up 8.21% to ₹4,969.82 crore in the third quarter of FY26. It was at ₹4,592.62 crore in the corresponding quarter.

Commenting on the results, its Managing Director & Chief Executive Officer, Rakshit Hargave, said, "The consolidated revenue growing by 9.5% during the quarter with profits growing faster at 17% underscores a return to healthy growth, driven by strong momentum across both the biscuits and adjacent categories, alongside a relatively stable commodity environment."

While the biscuit industry remains under stabilisation for price points post the GST rate reduction, the business grew by 12% in November & December.

This was "driven by sustained investments in media to strengthen brand visibility and enhancement of our product portfolio through innovations," he said.

HUL Q3 FY26 Earnings

FMCG major Hindustan Unilever Ltd (HUL) reported a two-fold jump in consolidated net profit to ₹6,603 crore in the December quarter of FY'26, on a year-on-year basis, driven by a one-off positive impact from the demerger of its ice cream business.

Its revenue from the sale of products was up 5.71% YoY at ₹16,197 crore in the December quarter.

"During the quarter, HUL delivered a "4% Underlying Volume Growth (UVG)," it said.

HUL's total expenses in the December quarter were at ₹13,078 crore, up 6.37%.

Its total income, which includes other revenue, was up 5.01% to ₹16,580 crore.

CEO Speak

"During the quarter, demand trends reflected early signs of recovery, underpinned by supportive policy measures," CEO and managing director Priya Nair said.

Nair further said, "Against this backdrop, we delivered a competitive performance, with 6% revenue growth and 4% underlying volume growth."

"We continued to build desirability at scale with our brands, accelerate market development in high-growth demand spaces and strengthen our capabilities to scale Channels of the Future with a dedicated organisation for quick commerce," she said.

What is the road ahead?

Bakery company Britannia Industries, which owns popular brands such as Good Day, Tiger, NutriChoice and MarieGold, said it would invest to fight the "regional competition" against small players and in e-commerce to become stronger in product categories like biscuits, rusk, cake, croissants and wafers.

As part of its strategy, Britannia will have a "startup mentality" to compete with small players having influence in small pockets, said Managing Director & Chief Executive Officer Rakshit Hargave.

"We are going to be fighting regional competition, and we are going to be investing in e-commerce; yes, that will require more funds. We are committed to investing in that. We believe that the opportunity for us to drive topline better is definitely there," said Hargave in an investors' call.

Hargave stressed that driving topline growth was critical to expanding Britannia's consumer base across its portfolio of brands, and the company would take a "pragmatic view" of balancing ambition with resources.

Hargave pointed out that inflation and delayed price hikes had impacted margins earlier, but with commodity prices tapering off, profitability has improved.

"Now, with the commodity prices stable, you see that expansion of margins," he said.

February and March are critical seasons for wheat, and based on this, we will see how the price behaves going ahead in the future. But at the moment, it looks to be stable. Moreover, sugar is also "kind of stable", and he believes that it will remain relatively stable going ahead. The same with cocoa, which has also come down, he said.

"Laminate price is also very stable, and milk price is also slightly stable. How milk behaves going ahead in the future is what we have to see," Hargave added.

While replying to a query, Hargave said Britannia is also open to inorganic opportunities to build a composite portfolio.

Hindustan Unilever

HUL expects FY27 to be better than the current fiscal year, as the demand scenario keeps on improving, CFO Niranjan Gupta said.

Besides, the company is also set to increase prices of the home care segment products, in which it operates with popular brands such as Surf Excel, Rin, Vim, and Domex in the detergent powder/liquid, dishwasher, and surface cleaner categories.

Crude oil prices have firmed up in recent weeks, while the rupee continues to depreciate, adding pressure on input costs across categories. Palm oil remains stable to inflation, said Gupta during the earnings calls.

Prices of sulphur and n-paraffins, which are the primary raw materials for home care products, are also rising.

"So we continue to evaluate the cost dynamics and the cost trends, and therefore we continue to take calibrated price increases," he said, adding, "When you look at within the segments, clearly you see home care; we have already taken some price increases, and some more will be taken up as we move forward to offset these increases."

When asked about the timeline, Gupta said, "So the home care price (increase) will be soon. Some (batches with increased prices) are already going into the market, and some will follow."

HUL, which reported a 5% revenue growth and 4% volume growth in the December quarter, expects further improvement in the demand scenario.

"Our broad-based growth in the current quarter reflects the gradual momentum across our portfolio," he said, adding, "Coupled with a positive operating environment, we expect growth in FY27 to be better than FY26."

Growth will continue to remain HUL's number one priority, Gupta added.

"We are moving with speed on our strategic priorities. As we look ahead, we expect the operating environment to remain conducive for a sustained recovery in consumption, aided by monsoon, normative inflation and supportive policy measures," he said.

However, Gupta also added that the geopolitical uncertainties will remain a concern, and it will continue to track them.

"We will continue to invest in the business as needed to support sustained growth, and hence we expect our EBITDA margins to stay around the current guided range," he said.

HUL: Rural vs urban market

About the urban versus rural markets, Gupta said that the demand from urban is picking up.

"We are seeing both urban and rural demand actually picking up. However, between them, we see rural demand actually picking up faster than urban demand," he said.