Britannia Industries Limited (NSE: BRITANNIA) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Ayush Agarwal — Investor Relations
Varun Berry — Executive Vice Chairman, Managing Director and Chief Executive Officer
Manoj Balgi — Chief Manufacturing and Procurement Officer
Vipin Kataria — Chief Manufacturing and Procurement Officer
Sudhir Nema — Chief Development and Quality Officer
N. Venkataraman — Executive Director and Chief Financial Officer
Analysts:
Abneesh Kumar Roy — Analyst
Mihir Shah — Analyst
Arnab Mitra — Analyst
Jaykumar Doshi — Analyst
Latika Chopra — Analyst
Percy Panthaki — Analyst
Lokesh Gusain — Analyst
Nihal Mahesh Jham — Analyst
Kunal Vora — Analyst
Tejas Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Britannia Industries Limited analyst conference call. [Operator Instructions]
I now hand the conference over to Mr. Ayush Agarwal from Investor Relations. Thank you, and over to you, Mr Agarwal.
Ayush Agarwal — Investor Relations
Thank you. 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 Q4 ’24-’25. Joining us today on this earnings call is our Executive Vice Chairman, Managing Director and CEO, Mr. Varun Berry; Executive Director and CFO, Mr. N. Venkataraman; Chief Commercial Officer, Sales and Replenishment; Mr Vipin Kataria; Chief Manufacturing and Procurement Officer, Mr. Manoj Balgi; and General Manager, Marketing, Mr. Siddharth Gupta.
The analyst deck is uploaded on our website. Before I pass it on to Mr. Berry, I would like to draw your attention to the safe harbor statement in the presentation.
Over to Mr. Berry with the remarks on the performance.
Varun Berry — Executive Vice Chairman, Managing Director and Chief Executive Officer
Good morning, everyone, and thank you for joining the call. So without much ado, let me jump into the presentation. So Page 1, basically, it’s showing the trends, the forecast that we are seeing. So it shows the real GDP as well as the nominal GDP trending upwards, and similarly, for the real private family consumption expenditure, as well as the nominal private consumption expenditure trending upwards in Q3 and Q4. So we are hoping that these are clear signs of recovery of the slowdown that we’ve seen in the FMCG industry.
On that positive note, let me move on to our performance scorecard. So in this quarter, we’ve seen a turnover of INR4,376 crores, which was on a 12-month growth basis was a 9% growth. And if you look at a two-year number, it’s a 12.4% growth. And on profit after tax, we’ve seen 12.8% of revenue for the fourth quarter, which is a 4% growth on a 12-month basis and a little flattish on the 24-month basis.
Moving on to the next slide, which is the revenue from operations. The revenue from operations for the full year was INR17,535 crores, which was a 6% growth. on a 12-month basis and about a 10% growth on a two-year basis. Our profit after tax was again 12.5% of revenue, which was a 3% growth quarter — year-on-year and a 12% growth on a two-year basis.
Now, getting to our strategic pillars, which you are well aware of, but just reiterating those, distribution and marketing, innovation, adjacent business growth, cost efficiencies and sustainability, and I’ll cover these one by one.
So, on distribution, we’ve made good progress. So if you look at March ’24 to March ’25, our total direct reach has gone up from 27.9 lakh outlets to 28.7 lakh outlets. And even our rural distributors have gone up from 30,000 to 31,000. We’ve also — next slide, we’ve also leveraged the new channels, e-com namely. The e-com growth has been 7.5 times what it is in other channels. And we’ve had some e-com only or e-com first launches. So Pure Magic Frames was one such launch, which was extremely successful. This was — the theme was the Harry Potter theme, and we saw some very good results, just launching it with the e-com and QuickCom channels.
Moving on, we also had some very exciting campaigns. So on Marie Gold, we had a campaign, which was a special edition pack, which we did with Avani Lekhara, who is the first Indian woman to win two gold medals at the Paralympics. And this biscuit was sized and edged with Avani’s gold winning targets. So that was a very exciting campaign that we did. The second one was during the Mahakumbh, we had — Good Day tied up with Ty Point, which gave us good mileage in that very large event in the country. We also have had some very exciting innovations in adjacencies. We’ve launched Winkin’ Cow Grow, which is a very exciting product at a very attractive price, and that’s doing quite well. It’s just been two months, but we are seeing great traction on that product. We’ve also relaunched cheese just about two months ago. And there, again, we — some channels have started to fire, and we are hoping that the overall numbers will start to look much better than the previous year.
We’ve also relaunched Cake. And there, again, it’s just been a couple of months, but we’re already seeing traction in all of the cake products post the relaunch, which included not just the recipe and product enhancement, but also the entire pack graphics have changed. And it’s a very, very exciting combination of products that we have today, and they are doing quite well for us.
Moving on to the next slide, which is on the other adjacent businesses, croissant has been a very good growth for us, high double-digit growth, which is three times that we are seeing on biscuits. And similarly on wafers, wafers has been a very, very good growth for us as well. Cake, I have already spoken about, and that’s giving us very good traction. Rusk, again, we relaunched it with a new pack design and which is just about a month back. In fact, the products are just hitting the market as we speak. But again, the growths are back, and we’ve got single-digit, high single-digit growth and hoping to get these into double digit as we move forward with the launch country-wide.
I’ve already spoken about cheese, as well as the new launch in drinks. In international as well, we’ve seen profitability move up and growth coming back in some of the markets where they were sort of stymied in the last two or three years. We’ve started to see very good growth in some of these markets and also the profitability has come back. As far as cost leadership is concerned, this program is, again, firing very well for us. Our target was to get to eight times of what we started with in 2013-’14. But this year, we went on overdrive because inflation had become pretty high, and we thought that we could do with some additional cost efficiencies and savings. So we’ve been able to achieve more than that. So ’24-’25 has been nine times of what we started with in 2013-’14. So it’s been a very good year for us, almost 2.5% of our overall revenue.
On the ESG front, we’ve had some good milestones as well. So some of the KPIs, we’ve been plastic neutral for the fourth consecutive year. We’ve had 79% of our packaging plastic recyclable, which is an improvement of 17% versus last year. We’ve also had 75% of our laminate waste, which is recycled, which is an improvement of 23% over last year. Britannia Nutrition Foundation today touches the lives of over 305,000 beneficiaries, and that’s an improvement of 31% versus last year. And we’ve assessed suppliers 479 Tier 1 suppliers. They’ve been assessed from an ESG standpoint, which covers 78% of our procurement spend. So these are all very important and very crucial KPIs from our perspective, and we are making sure that we take this to the next level as we get into the next year.
We’ve got some recognitions for what we’ve done, and these are all listed on the right side of the slide. I’m not going to belabor those recognitions. Moving on from a cost standpoint, we have seen aggressive inflation — so if you look at flour, if you look at versus previous quarter, which is Q3 of ’24-25, there was an inflation of 9%. And if you look at it from a year-on-year basis, there was a 12% inflation. Similarly, on palm, sequentially a 7% inflation, but year-on-year, a 54% inflation on palm oil. Sugar was flattish. Cocoa was flattish sequential or slightly down sequentially, but year-on-year was 83% inflation, and we are all aware of the cocoa story.
Laminates was fine. It was a small inflation from a year-on-year basis. Milk again was 11% sequential and a 21% inflation from a year-on-year basis. So this clearly is a story where there was a pretty aggressive inflation and which necessitated us taking some action on the pricing front, and that’s what we did, which kept our profits in good shape. Now from a cost and profitability front, price actions I’ve already spoken about. Cost savings I’ve already spoken about. We doubled down on cost savings and made sure that we did more than what we planned. And media investments, we had to make sure that we do what was necessary. So we focused on innovations and all the adjacencies and the crucial brands within our portfolio focused on those, and we did what was necessary with those.
From an outlook perspective, we obviously are very closely monitoring which way the commodity prices move. We are going through the phase when the new season wheat comes in. And we’re not very clear at this stage that whether the inflation is going to be as far as wheat is concerned, but we are closely monitoring that and similarly, other commodities as well. And we are also very vigilant about the fact that we’ve taken pricing and making sure that we are not priced out of the market. It seems that inflation is hurting everyone. So it seems to be moving in the right direction. The focus will remain on sustaining margins, and also at the same time, remaining competitive.
Next slide is about our revenue trends. Our revenue growth, as I said, was — for this quarter was 9% and for the full year has been 6%. And we’ve seen — as you see it in the last four years, we’ve seen a very good year in ’22-23 with a 15% growth. And then we’ve seen two tepid years of 4% and 6%. But we are hopeful that things should move in the right direction now on because the quarter has been, I would say, reasonably good from a growth standpoint. From an operating profit standpoint, again, it’s been a pretty good profit that we’ve looked at. Operating profit has been at 16.4% for the full year and 16.6% for the quarter. So it seems that from both top line and bottom line perspective, if things remain within a certain margin, and I’m talking about inflation, as well as the growth trends, etc., we should be in the right place.
Now, looking at the overall consolidated report, so net sales for the quarter, 9%. Operating profit has gone up by 2.4%. Profit before tax is also 2.4% and profit after tax has gone up by 4% and the full year numbers are on the right-hand side. If we look at the ratios, the ratios are looking reasonably solid, I would say, 16.4% profit from operations, profit before tax of 16.7% and profit after tax of 12.4%.
So that’s the story from my side. I’m very happy to answer your questions now.
Questions and Answers:
Operator
Thank you. [Operator Instructions] First question comes from the line of Abneesh Kumar Roy with Nuvama. Please go ahead.
Abneesh Kumar Roy
Yeah, thanks. Congrats on good performance. I have three questions. My first question is on the demand-side. You have seen a seven-quarter high sales growth this quarter. Was there a significant impact of? Coca-Cola saw INR18 crores servings being sold-in Q4 in Mela and your product also has very-high demand in such demand scenario. So that was one bit on-demand. Second is on the outlook, you said clear signs of recovery. And this quarter almost every FMCG company has said issue is last two years, FMCG has seen many false starts. So what will be your confidence level in terms of recovery in FY ’26? That is the first question.
Varun Berry
Okay. So, Anneesh, we — you know, because we are so widespread, it’s not one event which really makes a difference to our overall sales. And we did well in Lakum, but no, it’s too small to impact our overall sales for the — for the country and for the globe as well. So it — no, we’ve seen — we’ve seen some recovery and which is the good trend and which gets me to your second question, which is on the outlook. I’m reasonably optimistic on the recovery happening. I don’t think it’s going to happen you know, it’s not going to be a hockey-stick, but I do think that there is — we have seen gradual recovery and I do think that this trend is going to continue into the next year as well.
Abneesh Kumar Roy
So thanks. My second question is on the competitive intensity. So this time the market-share chart seems to be missing. So if you could tell us any reasons for that. Second is lot of categories, there is a competition from D2C. We have seen some level of impact on beauty personal care from D2C companies. In your categories, is there an impact, especially now I’m seeing Tata acquisition now going to rust, for example, that’s also a startup and B2C now acquired by Tata Consumer. So if you could discuss competitive intensity from D2C and market-share data, is there a change?
Varun Berry
No, so Nielsen has done a complete you change of their panel. So there is — the data even historically has changed, etc. So we were waiting for you know, the stability to come through, but there’s hardly any change in the market-share data. It’s just that we are not clear what their final numbers are going to be once they sort of clear up their panel. But it’s — it’s in the same ballpark. We have not seen — so you — your witness, Abneesh, to what other companies report in their calls as well. And it doesn’t seem that we seem to be growing the fastest as far as our category is concerned. Yes, there are a lot of unlisted players who do not declare the results. But I do think that we are definitely in the top 10% as far as growth is concerned within all of our categories. D2C players, I don’t think they have impacted us to an extent where it’s becoming an issue for us especially Tata, I personally haven’t seen them make a big dent in any way in the market from a RASK standpoint. As you know, RASK in any case has about 2,500 players. It’s a bit like salty snacks, right? Every — every town in the north will have a manufacturer. So we’ve been dealing with that kind of competition and we’ve been dealing with it quite well. And I do think that because of our brand and because of our product and because of all of that we do, that will hold us in good stead. But having said that, I do think that this is a space that we need to watch because with one trade growing and with e-commerce and quick commerce growing, this could be a phenomenon which you must watch carefully and make sure that we deal with it in the right direction, right way.
Abneesh Kumar Roy
So thanks. One last quick question and then I’ll end there. So if I see the adjacency, you have been driving a whole food company kind of a strategy. And I see you talking much more positively on, on drain and to an extent maybe also. On cheese, it’s a relaunch and if you measure now versus when the JV was announced and now, would you be happy with the performance? I don’t know-how is the performance, so I’m asking. And is urban slowdown impacting and is this more of a commodity play because I do see a lot of aggressive pricing by some of the newer companies also. So if you could tell us how has it lived up to initial expectation? And can the trajectory change to a higher-level in the next two, three years?
Varun Berry
No. So absolutely,. So yes, you’re right. I talk more positively about all of the other categories, including cake now after the relaunch, the growth are now pretty solid. Cheese, you know what’s happened after the relaunch, as you are rightly saying, the pricing, so there are some players who don’t have a distribution system, right? So what they do is they — whatever channels are available, which is modern trade and e-com, they discount the hell out of their product in those channels and which is what we had to match earlier because we were at a, 25% 30% premium and which was creating a disparity between the channels and we realized that. And we — for us, our big muscle is traditional trade. And if there is disparity, it tends to hit our big muscle. So now with the relaunch, what we’ve done is we priced every channel of the same price. There might be packs which are different for different channels, but the pricing is the same. As a result of that, we are seeing a 40 plus percent growth in our traditional trade business. There still are some areas which need to be sorted-out and we are sorting them out. And you know the overall cheese business we are very hopeful will you know, start to look very good as we go-forward. But I don’t want to declare victory without really getting that under our belt. So that’s the reason that I’ve not sort of emphasized that. But the trends, early trends on the traditional trade part of the business and also on the e-com business is very, very good. So finger crossed, we are hoping that the sales team as well as the dairy team will take this to a very, very different level in the coming months.
Operator
Thank you. Mr. Roy, please rejoin the queue for more questions. [Operator Instructions] Next question comes from the line of Mihir Shah with Nomura. Please go ahead.
Mihir Shah
Hi, sir. Thank you for taking my question. So has constantly increasing its direct reach. Now as you highlighted, that demand is expected to come back. What is the level of volume growth that you expect to be a reasonable level? And this is also keeping in mind that you will start — you will start cycling a higher-volume growth base from 1Q onwards. So that’s my so while you we, we actually you know, because there is an echo coming can you put yourself on-mute?
Varun Berry
Hello. Nihib? Yes, sir. Yeah. Yeah. So yeah, so the volume growth have been reasonably good for us compared to our revenue growth even in the last two years. Whenever there is inflation and you take pricing, obviously, the delta between revenue and volume increases. But we are hopeful that as we go through depending on the level of inflation, we should see both revenue as well as volume growth. And this year will be a test. So we are hoping that we’ll be able to grow revenue and volumes. Obviously, there’ll be a delta because we’ve taken a pretty high-price increase in the last quarter and we will be — will be necessitated to take slightly more price increases to make sure that we deal with the inflation which comes in. But having said that, we are hoping to see healthy growth, both volume as well as revenue. Got it, sir. Sir, secondly, how should we think about pricing from here on? Key raw materials have started to correct quite a bit. So would it be fair to assume that there is no further price increase that one should expect from here?
Mihir Shah
And secondly, do you foresee any competition for smaller players to start taking price cuts sooner than expected?
Varun Berry
No, Mihir. We don’t see that happening because there has been a lot of inflation this year and we started to take price increases pretty late in the year and so did the others. So even if there is a correction as far as inflation is concerned, I don’t see a reaction of price cuts, et-cetera from smaller players. It might just be that thereafter we might not need any more price increases. So that’s why we are keeping our eye on the ball just to make sure that we do not miss the trend and we do what is right for the business.
Mihir Shah
Understood. Sir, if I may squeeze just one more insight. So on other expenses, they have been lower since the past two quarters. Can one say it’s largely because of lower ad spend and as you’re expecting volumes to support volumes, can this number start inching up going-forward and you’ll continue to do that? What is the level of operating margin that you will be comfortable with?
Varun Berry
We don’t give any forward-looking statements, Mihil, but we are comfortable in the zone that we are today and we would like to stay within that zone and try and make sure that our profit growth are higher than our revenue growth as we go-forward.
Mihir Shah
Thank you, sir, wishing you all the best. Thank you.
Operator
Thank you. Next question comes from the line of Arnab Mitra with Goldman Sachs. Please go ahead.
Arnab Mitra
Yeah. Hi, Varun. My first question was on this quarter. Could you just help us with the split of volume and price growth? And in the light of whatever pricing you’ve taken, I’m sure some pricing will flow-in more in the second — in the next few quarters. How much of price growth do we expect at this stage for FY ’26?
Varun Berry
Yeah. So the delta is about 5.5% between pricing and between revenue and volume. And it depends — I don’t think we will need to take any more price increases. There will be some remnants of the price increase which move into the first two months of this quarter. But thereafter, I think we — the way the commodity situation looks, it might not be necessary to take pricing beyond that. But you know, that will all depend on how the trends move through the quarter and we will have to take a call based on those trends.
Arnab Mitra
Yeah, thanks. That’s very helpful. The second actually just to repeat just following-up on the input cost question. So we broadly know that palm oil and crude has seen some correction sequentially. How is your expectation on wheat prices because I know the season is already done? And in that light, would you say that, I mean, whatever input cost deflation we see potentially goes now into improving gross margins back to the historical trend-line or there could be a possibility of lowering prices if the current spot prices hold in some of these commodities?
Varun Berry
No, I don’t think wheat prices we will see a deflation in the wheat prices. Actually, I’d let Manoj comment on that, Manoj.
Manoj Balgi
Yeah. So this is Manoj. Wheat prices have been higher than last year, though the crop has been higher than last year, but the minimum support price offered by government is about 7% higher and we don’t expect a deflation in wheat prices.
Arnab Mitra
Sure, understood. That’s very helpful. Thanks. That’s it from my side. All the best.
Operator
Yeah. Thank you. Next question comes from the line of Jay Kumar Toshi with Kotak. Please go ahead.
Jaykumar Doshi
Yeah. Hi, thanks for the opportunity. My question is on succession planning. We saw that you’ve been appointed as CEO as well. So are you not looking to hire a CEO anymore? I mean there after Rajneet moved out?
Varun Berry
No, no, that’s not the point. This is or is this an interim arrangement till you hire? Yeah. So it’s a statutory requirement that a position of CEO has to be filled. So that’s where it is. But the succession planning is in play and you know it will definitely be clear to you in the next three, four months. So things are in play. So I can’t comment anything more than that right now.
Jaykumar Doshi
That’s helpful. Thank you so much. That’s it from my side. Thank you.
Operator
Thank you. Next question comes from the line of Latika Chopra with J.P. Morgan. Please go ahead.
Latika Chopra
Hi. My first question was around the revenue growth outlook. You mentioned you would want to maintain both volume and value growth sustaining. Looking at price increases are going to amount to roughly 5%, 6%, the kind of price increases we saw in Q4 is to play-out. I just wanted to understand the volume growth you mentioned, was that a tonnage volume growth or in terms of number of packs sold because some of the price increases could be in the form of grammit reduction? And as you look-forward to FY ’26, do you get a sense of, you know, arriving at a double-digit kind of trend for revenue growth, we clocked 9% in Q4.
Varun Berry
So whenever we talk about volume growth, they are not in a number of packets. They’re always in tonnages. So — and that’s why the delta, right. If we were looking at package, I don’t think there would be much of a delta between revenue and volumes, right? So it’s tonnage. And your second question was, what was it, sorry, Latika, I’m — for FY ’26, how do you anticipate — is there a cost? You’re talking about yeah. Yeah, our endeavor always will be to get back to double-digits because you know, as I’ve always been saying, with India being the developing country, obviously becoming a very large economy, it’s important that in categories like ours, we see double-digit growth. So yeah, the hope is that we get back to double-digit growth with time.
Latika Chopra
Yes, thank you. The second question was around two key levers for our revenue growth for you. One is distribution. We continue to see the direct reach continuing to add for you. I think this is already probably the best-in the industry at 2.9 million outlets. What is the scope for this to expand to? And if you could throw some color on what is the total reach for you? And the second piece is on innovation and new launches. Could you share, is there a push by the company or towards premizing the portfolio? Are there any metrics you can share which could give us some color on, you know, how the premium part of your portfolio is growing? Thank you.
Varun Berry
Yeah. So good question,. So what we are looking at now, as you know that we are doing the route-to-market project and the route-to-market project is going to give us our ability to have a — the number of SKUs that we have in the large outlets, the more potential outlets. We want to increase our depth there. And obviously, obviously at the — at the village level and at the rural level, we want our width to increase. So we are working on both, but the width improvement is going to be as long as you know, it doesn’t start to — we also look at our volume per outlet. And obviously, even in small towns and villages, there are outlets which sell very-high volumes and very-high revenues of our products, which we sometimes miss. So the BPO is very important for us. So we are not doing it mindlessly. It’s not like with at any cost. We are also looking at-cost and we are saying that at the top-end, we get debt. At the bottom-end, we get width and we do it in a way that it — the revenue that we get is as profitable as our revenues which we get today. And I’ll ask Vipin to comment on that. Vipin?
Vipin Kataria
Yeah. So I think basically, just to give you a sense of the category, we are into one of the most you know widely distributed categories, a 9 million base, we reach about 3 million directly, right, and then there is a component of indirect and indirectifying asset direct, so our total reached about 6.5 million and over a period of time, we’re adding distribution both direct as well as indirect. But what we also realized, like is saying is that we have got almost 25 different sub-brands and multiple categories. And we need to figure out a way on how do we service all the high-potential ultra potential outlets far better so that we go to the right kind of consumers, we go to the right kind of outlet cohorts and that’s the mid-to-market journey that we are talking about and we are in the middle of it and we are getting good positive results out of it. And therefore, we have to make sure that we truly behave like a total foods company. We are ensuring that not only the width of the coverage, but also the kind of categories that sell-in these relevant outlets become a big initiative from our side? Yeah, I hope that answers your question.
Latika Chopra
Yeah. Now thank you. Any color you want to share the premium mix for you, any metrics you had for the premium?
Varun Berry
Yeah. Yeah. So, you’ve seen the kind of products that we’ve launched. So pure Magic frames is one such example. A very, very premium product, very, very salient property that we’ve signed-up for this, which is Harry Potter and similarly a lot of other products that we’ve launched which are in this space. So yes, we are making sure that we increase our premium play and that’s what’s, you know, helping us keep our portfolio at the right level. In fact, a lot of our premium products are doing quite well. Sid, do you want to comment on that?
Sudhir Nema
Yeah. So just to add, so what we’ve done is across all your salient categories, we have a fair understanding of what are the consumer need spaces and how they are evolving and they are evolving quite a rapidly across the spectrum. And basis that across critical categories, we have a very clear role of the portfolio, which includes, as Varun was saying, the critical products that will be needed to cater to the evolving yields and the products that we’ve already launched in the market, for example, pure magic frames, how do we build-on and take them to a much bigger scale, which is the response. So we have very clear framework identified across all our key categories on premiumization and that continues to be a key lever for us that we are building upon. And we’ve got some very exciting products coming up this year as well in the next two or three months. So yes, premium trade will increase as we go-forward. Thank you you.
Operator
Thank you. Next question comes from the line of Percy Panthaki with IIFL Securities. Please go ahead.
Percy Panthaki
Hi, good morning, Varun and team. My first question is, it’s been about 10 years or so approximately since we first laid out this vision of being a total foods company. However, I haven’t seen any new category being introduced since then, maybe with the exception of Crossant and some launch of milkshakes, but I’ll take that as a sort of product within the dairy portfolio. So I just wanted to understand. Yeah, I just want to understand if basically you’re just happy growing the adjacencies and of course, there would be innovation, renovation as part of any company business-as-usual. But are you happy growing the current adjacencies for now and maybe some new category either organically or inorganically isn’t an immediate focus for you in the next one or two years?
Varun Berry
See, Percy, first of all, we have gotten into — so as we spelt out when we’ve gotten into this strategy, the idea was to look at categories which are extremely close to what we do and then start to get further and further, right? And with that, we’ve launched — so frankly, it seems like it’s within the same category, but frankly, today, we’ve got a lot of products which are completely new and have crossed — some of them have crossed INR100 crores, some of them have crossed INR200 crores. So you know across all getting close to INR200 crores, milkshakes crossed INR200 crores and beyond, beyond wafers getting to crossing INR100 crores. So lots of these categories and which are giving us that, you know bump-up. So I think — and these are all like we didn’t know ABC of milkshakes, right? We were not a drinks company, right. And we took the plunge and put in the best technology, we have today aseptic line, which when we — when we put it up, even Coke and Pepsi didn’t have it, right? So we’ve done it the right way. We’ve got good results. We are seeing things moving in the right direction.
Now, has it made a difference, which we would have expected, well, it certainly added up to give us the adjacent portfolio, which is much larger than what it used to be. But I would say that probably we’ve been, you know, caught at a time when the economic situation was a little tough and FMCG were not getting their time in the sun. But today, I feel and very clearly feel from even trends that we see in the market that all of these and adjacencies, I call adjacencies, which is anything outside of the biscuits. All of these are looking very positive and we are seeing really good growth. And even within, let’s say, a cake category, right, there’s so many new products that we’ve launched. We’ve won layer, we’ve launched Swiss, we’ve launch brownie, we’ve launched so many of these products which are — which you cannot call as extensions or these are not extensions. Some of them have completely different technology. So from that standpoint, I think we will stay with this for the time-being. We are not going to, you know, violently go wide where we go very far away from our core. We will stay with this, but we will make sure that whatever we’ve done, we double down on it and grow it at a very rapid pace. So that will be the plan. And wherever we have opportunities, we will test market. And if there are big opportunities, we will launch. But more or less, we will stay and grow. The current categories that we have because there is immense potential to take them to the next level.
Percy Panthaki
Got it, Varun. Just your thoughts, I mean, this is not a guidance or any particular target, but just your thoughts on if I were to say over the next five years, what would be the growth differential between the biscuits and the non-biscuits portfolio?
Varun Berry
So I would say one is to 1.5%. So if biscuits growth is yeah.
Percy Panthaki
Got it, got it. That’s very helpful, Varun. Thanks and all the best. That’s all from me. Thanks.
Operator
Thank you. Next question comes from the line of Lokesh Gusain with BOB Capital Markets. Please go ahead.
Lokesh Gusain
All right. Thanks for taking my question. So I just got two questions. First is on the sales. If you could clarify the focus on its sales performance relative to the rest of India for the 4th-quarter? Then secondly on costs regarding your cost-saving initiatives, you’ve got six verticals. Is there any vertical out of these which stood out in the 4th-quarter? Since your cost-savings as a percentage of sales went up quite a bit, just trying to understand what’s a sustainable rate and what are your targets for FY ’26 on cost-savings as a percentage of sales? Thank you.
Varun Berry
Thanks. So let me let me get to the second question first. And I’ll ask Venkat to answer that because he is the architect of this. Venkat, are you there?
N. Venkataraman
Yes. So, as far as the cost-efficiency for the year is concerned, the framework largely is the same. What we have done is to have gone deeper. So some of the areas where we managed to get some additional benefits in ’24, ’25 has been the areas of fiscal incentives because as you know, the Maharashtra facility was recognized as an ultra mega project and therefore the incentives applicable to the ultra mega projects came through in ’24, ’25 for us. Also, the facility in UP, the greenfield unit that was set-up in UP or the approval for incentives in the current financial year. So these are two significant benefits that we saw in the current year. There’s also a lot of value engineering projects, which were driven by R&D, focusing on reducing wast wastages and packaging as well yeah packaging and wastages correct in addition these initiatives were largely around improving manufacturing efficiencies. Buying efficiencies was a very significant thing that we worked on in the current year, also on distribution. So I think broadly, these are the areas that we have been able to work on. And like Varun said, it has been nine times what we started the program with in ’24, ’25. And in ’25, ’26, it’s — we are planning something over 2.5% to the top-line. So, understood. That is right. And then just on the 4th-quarter, would it be fair to say that buying efficiencies were a major part of the incremental savings that you got? It was across. I wouldn’t — yeah, no buying efficiency was higher. You’re right in Q4.
Lokesh Gusain
Correct. Understood. Thanks. And on sales, if you could — sorry. Thank you.
Operator
The next question comes from the line of Nihal Mahesh Jham with HSBC Securities. Please go ahead.
Nihal Mahesh Jham
Hi, good morning. I just had one question. Is it possible to share the proportion of adjacencies for FY ’25? And if you could give a ballpark split among the adjacency portfolios?
Varun Berry
So the adjacency portfolio, there are, you know the big ones are cake, rusk, dairy, bread, they’re all about the same size, about, let’s say, 100 million give or take. And then we have the smaller ones which were launched in the last four or five years, crosser milkshakes, wafers, which are all-in between INR100 crore and INR200 crores of INR10250 crores. So wha what’s, what’s the split today?
N. Venkataraman
It will be about 75%-25%.
Varun Berry
75%-25%.
N. Venkataraman
Yeah.
Nihal Mahesh Jham
Thank you so much.
Operator
Thank you. Next question comes from the line of Kunal Vora with BNP Paribas. Please go ahead.
Kunal Vora
Yeah, thanks for the opportunity. Maybe if you can give a similar breakup in case of raw-material, how much is wheat, palm oil, sugar, cocoa for FY ’24 composition of raw materials?
Varun Berry
Manoj, you can take that question.
Manoj Balgi
So from a percentage point-of-view, roughly about wheat and oil will be about 30% each and about 20% by sugar.
Kunal Vora
Understood. Okay. And secondly…
Varun Berry
Lots of small ones.
Kunal Vora
Understood, sir. Thanks. Second one is on quick commerce and how it impacts you. I mean, like just if you can give a sense of what is the contribution, what kind of packs get sold? Are you seeing any additional competition because of it as consumers reduce their visits to Kirana, does it result in loss of some impulse purchase?
Varun Berry
So yeah, just your sense on how quick commerce impacts your business? So quick commerce is now approximately 4% of our sales. Well, quick commerce and e-commerce, but a large part of that is quick commerce today. And it’s been growing fast but still reasonably small in the overall contribution. Obviously the convenience of it, the consumers are enjoying that. That it’s you know it’s, it’s growing because there’s a three cornered fight between the three big players in that space. I think certain categories where it’s even become 30% and 35%. But in our case, I see this move from, let’s say, 4% to 8% in the next three years, but not beyond that. Vipin, would you like to comment on that?
Vipin Kataria
Yeah. So see, first, just to tell you about the composition of the Q-commerce in total across categories. So the biggest in Q-commerce is, let’s say, staples and groceries, then comes in your cash, which is basically milk, pouch curved, right, then there is personal care and then it’s packaged foods, right? So from that perspective, when you compare this 4% savings coming out of e-com, right, is fairly decent because in personal care, that same percentage will be double-digit, right? So I think we are rightly placed in terms of percentage savings. Point number two is that we are consistently gaining market-share. Third is that we are aware of this entire disruption, which the personal care space has seen because there’s a lot of insurgency which comes into play and therefore, if you hear what was saying was that there are lot of digital-first brands that we have lined up.
In fact, couple of them have seen good success like frames and we have got few more lined-up in this year as well. So therefore, we do protect our core, gain share there and also make sure that all the insurgent brands are basically taken care of lot of these digital-first brands. I think how we see e-com is basically part of the route-to-market, which is how do you make sure that you augment the general trade, right, in terms of reaching to the consumer. So let me give you examples. There are a lot of premium products which general trade stores are hesitate to stock, but we’ve been able to turn the tail and make those picks. Let me quote an example of, let’s say, cake or brownie. So brownie is a product which might face limited distribution because of some presences. But through e-commerce, we were able to make significantly good business out of it, right? So therefore, the playbook is that we take a non-conflicting roof, we take a roof which augments our overall distribution and selling and that is how we’ve been driving e-commerce going-forward as well.
Kunal Vora
Understood. And does it result in any loss of impulse purchases because the consumers like step out to the Kiranas less?
Vipin Kataria
Yeah, I think it only adds to impulse because if you see here and all of us are also QCOM. So instant gratification, occasion-led buying is only getting and accentuated through Q-commerce, right? And therefore, our portfolio is finding good favor in Q2. And then we also have a large business, right, to make sure that we are there in a lot of places where impulse consumption happens.
Kunal Vora
Thank you. And just one last quick question. Other operating income, you had a big increase because of maybe incentives, 4 billion. Where does it go from here?
Varun Berry
Venkat, do you want to take that?
N. Venkataraman
No, it should. We are not setting up any new units. Now most of the units that we had set-up are eligible for incentives, the one in TN, UP, Orissa and Biharsh and Puni. So these are the incentives that we are eligible for. So it should stabilize is my sense.
Kunal Vora
Okay. And for how many years does this continue maybe at close to current levels or maybe a little more than that? So each one is for a different period of time yeah and some of them will end soon some of them will continue longer
Varun Berry
But the big one is Ranjangaon, which will continue for how many years Venkat?
N. Venkataraman
It is still 2037 or ’38.
Kunal Vora
Okay. Understood. Okay. That’s it from me. Thank you.
Operator
Thank you. Next question comes from the line of Jaykumar Doshi with Kotak. Please go ahead.
Jaykumar Doshi
Yeah. Hi, thanks for the opportunity again. One request, if you could add some disclosures on biscuits and adjacencies either on a six-monthly or annual basis because the 70-20 — 75-25 split has been there for a few years now. And when I look at the old interviews, you’ve always maintained that 75 25 should go to 65 35 in five years. But when we ask you this mix at the end of every year, it doesn’t seem to change. So it will help us appreciate the progress better, sir. If you can — even once in a year also will be good to know. Second is, when I — when I look at your strategy and I ask you this question a couple of years back on inorganic — how do you think about inorganic now. For a company with your kind of cash flows, when we compare you versus other F&B players, we have seen some of your peers have you, be more open to inorganic opportunities and there are some success stories as well. And we don’t even sort of hear about Britannia evaluating any, right? For instance, there was Capital Foods or there have been other such acquisitions. Britania is not even a participating in or evaluating it. So is there a group level resistance or reluctance on inorganic and is it that you’re happy with whatever you can do organically, you don’t really want to grow faster through inorganic route?
Varun Berry
No, that’s not true, Jay. We — we would be happy to look at it. It’s just that we are very conscious of returns, right? Whatever we invest in, we would like to see returns. And whenever we’ve seen any of these big transactions that have happened, we have evaluated them, but we haven’t been able to figure out how we’ll get returns on these transactions. But you — you tell us is any of — any of these big transactions have really been worth it? Have they given the returns to these companies, we feel that getting a ROI on any of these investments is very tough because the valuations in the country. But would be very happy to stand corrected if you feel that there have been some big transactions which we could have missed. I think, I mean, has done fairly well for, still early days and I mean Capital Foods is also something still early days, but I just thought, I mean you know, so a fair point. I take your sort of got your perspective.
Jaykumar Doshi
Thank you. Yeah. Thanks.
Operator
Thank you. Last question comes from the line of Tejas Shah with Avendus Spark. Please go ahead, sir.
Tejas Shah
Hi, everyone. Thanks for the opportunity. Varun, your decade-long cost-saving discipline has been exceptional across FMCG. But at some point do efficiency gains start to taper off? And is there a risk of cutting into growth-linked spends in pursuit of savings?
Varun Berry
I don’t think so. See, I think I’ve said this earlier as well. We in India, we tend to get spoiled by the by the kind of growth we get and hence cost efficiencies takes a backseat. Think about companies that operate in countries with, let’s say, in Japan or in the US where the growth are 0.5% or 1%, right, and price increase opportunities are very limited. The entire focus is on cost efficiencies to make sure that they shore up their bottom-line year-on-year. And we’ve learned from them, right? We’ve looked at how they sort of go after costs and how they get these costs. And every company has great opportunities to optimize costs, right? So I think that there is a pipeline of projects that we could look at. We see them every year, but obviously, there is a limit on how many we can handle. So we focus on the large ones and we — then we start to — so the process is very good. Our process starts in the month of November, let’s say, right, and we start to identify these projects for the year starting on the 1st of April. And then we start to build-on these and we — and these are cross-functional teams which work on them and start to implement them. So I think we’ve defined the process very well and our teams — the inherent thinking of our team is to make sure that we get these costs home. So it works very well and it — I do think that this is not going anywhere. We have enough projects to take us through the next 10 years with the same kind of savings.
Tejas Shah
Got it. Second, we have done fabulously well on quick commerce as a channel. Just wanted to know-how do you see it in terms of margin accretion and working capital discipline and overall scheme of them?
Varun Berry
So for us, so again, you know, it’s a mindset within the organization to make sure that we look at profitability for every channel. So for these channels, it’s very important — very important to make sure that the profitability is looked at. And these are — I wouldn’t say they are accretive overall, but they are certainly in the same ballpack — ballpark as our overall profitability. And we are very conscious of that because if you have tailwinds in a certain channel or certain pack or a certain brand, it’s important that channel or that pack or that brand is equal to or greater than the profitability of the company and that we focus on to make sure that we don’t lose that aspect of our profitability. So that’s how it works for Q-commerce as well as e-commerce. And despite that, we’ve also been gaining share within these channels.. And even on working capital, they are equally good.
Tejas Shah
Yes. Okay. That’s all from my side and all the best for coming quarters. Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. Ayush Agarwal for closing comments.
Ayush Agarwal
Thank you. Thank you, everyone, for spending time with us on the call today. We look-forward to interacting with you again in the future. Thank you. Thank you.
Operator
[Operator Closing Remarks]