GST Cut Could Help Britannia Take Bigger Bite Of Biscuit Market: SEBI RA Varunkumar Patel

For packaged food makers, the GST revamp is a game-changing development. Products such as biscuits, cornflakes, sugar confectionery, and pastries, which were previously taxed at 12% or 18% GST, will now be taxed at a rate of just 5%. This steep 7-13 percentage points cut directly reduces the tax burden on core revenue for companies like Britannia, said SEBI-registered analyst Varunkumar Patel.

Demand Boost For Smaller Units

The impact on demand could be significant. Lower prices make packaged snacks more affordable, especially in rural and semi-urban areas where consumers are highly price-sensitive, Patel said.

Value packs in the ₹5 - ₹10 range are likely to benefit from increased grammage or higher sales volumes, which will drive overall unit growth. If Britannia retains part of the tax savings, it could secure an additional margin cushion.

The analyst noted that even if only part of the tax savings is passed on to consumers, Britannia could still see margin gains - something investors will watch closely in the next earnings update.

Patel expects Britannia's strong distribution network, brand equity, and innovation pipeline will allow it to gain market share from regional and unorganized players who may struggle to keep pace.

Technical Analysis

On the charts, momentum indicators show strength, though short-term signals suggest the stock is nearing overbought territory, the analyst said.

Patel flags ₹6,000 - ₹6,100 as a zone for consolidation, with support seen around the ₹5,500 - ₹5,550 range. For medium-term investors, the broader trend remains constructive, driven by macro tailwinds and sector-specific demand revival.

Stock Watch

After a strong 5-day rally, Britannia's shares are down 1%, likely on profit booking. The stock has declined just once in the previous eight sessions.

That said, retail sentiment on Stocktwits stays“neutral,” much like it has for most of the past year.

There has been some selling pressure this year, with the stock has shedding nearly a fifth of its value since January 1.

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