Britannia Faces Leadership Crisis as Berry Exits Abruptly
Shares of Britannia Industries Ltd, India's leading biscuit manufacturer with a 133-year legacy, witnessed a sharp decline of 6.7% on Tuesday following the sudden resignation of chief executive officer Varun Berry. The stock dropped to an intraday low of ₹5,721.70 on the Bombay Stock Exchange, marking a significant setback for a company that had seen its shares advance over 8.76% this year.
Unexpected Leadership Transition
Berry's resignation came as a surprise to investors, occurring barely a week after Britannia announced on 5 November the appointment of Rakshit Hargave as its new CEO effective 15 December. In a parallel development, Hargave resigned as chief executive officer of Birla Opus on the same day, clearing the path for his transition to Britannia.
The board of directors accepted Berry's resignation and waived his notice period, relieving him immediately from his positions as vice-chairman, managing director and CEO. During this interim period, executive director and CFO N. Venkataraman will assume additional responsibilities as CEO until Hargave formally joins the company.
Market Reaction and Analyst Perspectives
Market analysts expressed concern over the timing of Berry's departure. Vishal Punmiya, consumer sector analyst at Yes Securities, noted: "The stock reacted negatively because of the resignation of Mr Varun Berry. We were expecting it to happen maybe next year, after Mr Hargave got settled in his role. Investors had expected him to stay on and help Mr Hargave settle in, at least during the transition. That didn't happen, so the market is viewing it as a short-term negative."
Ajay Thakur, lead FMCG analyst at Anand Rathi Institutional Equities, highlighted the leadership vacuum created by the sudden exit. "If you look at it, in a month's time frame, there's no clear leadership at Britannia. That obviously has some implications for the company's performance," he stated, emphasizing that the lack of overlap between outgoing and incoming leadership could negatively impact market sentiment.
Berry's Transformative Legacy
According to a Motilal Oswal analyst note dated 10 November, Berry's departure represents a "big guard change" for Britannia, which they described as "one of India's best turnaround stories" under his leadership.
When Berry took charge as CEO in 2013 at age 52, following a two-decade stint at PepsiCo, Britannia was perceived as a commodity player with weak operating margins. Under his stewardship, the company underwent a remarkable transformation:
- Operating margins surged from 7% in FY13 to 18% in FY25
- Net margins improved from 4% to 12%
- Rural distributor base expanded from 7,000 in FY15 to 31,000 in FY25
- Direct retail reach more than doubled to 2.9 million outlets
Berry successfully diversified Britannia beyond its flagship biscuit portfolio—including popular brands like Good Day, Marie Gold and Bourbon—into new snacking categories such as croissants, rusks, dairy, salty snacks and wafers. His implementation of a 'zero-day' inventory model and reduction of third-party dependencies resulted in annual savings of nearly 2% of sales.
New Leadership and Future Prospects
Analysts remain optimistic about incoming CEO Rakshit Hargave, who previously served as the first chief executive of Birla Opus. Under Hargave's leadership, Birla Opus successfully disrupted the decorative paints market dominated by established players like Asian Paints, Berger Paints and Kansai Nerolac.
Thakur of Anand Rathi commented on Hargave's credentials: "He should be seen as a performer with solid credentials. He's joining at a very right, conducive time. Input costs have bottomed out and the next two quarters look better for Britannia. That gives him space to lay the groundwork for future growth."
Despite the initial market reaction, analysts believe the company will stabilize once the new leadership establishes its strategy and operational framework. The transition period, however, remains critical for maintaining Britannia's competitive edge in the rapidly evolving FMCG landscape.
Britannia did not immediately respond to queries regarding the waiver of Berry's notice period, while Berry himself remained unavailable for comments on his sudden departure.
