The makers of your favourite morning biscuit is in the spotlight today. Britannia Industries’ share price shot up over 4% in early trade.
The company announced its results for the first quarter of FY27. The consolidated revenue for Q1 stood at Rs 5,000 crore, up 8.2% year-on-year.
Furthermore, brokerage house Nuvama gave the stock a ‘Buy’ rating. It set a target price of Rs 7,240. This translates to an upside potential of 49% from the current market price.
Let’s take a look at the key factors why Nuvama believes the stock could rally close to 50% from current levels.
Britannia Q1FY27: How the numbers add up
Britannia’s revenue for the quarter came in at around Rs 5,000 crore. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), a measure of core operating profit, stood near Rs 840 crore.
The revenue grew 8.2% year-on-Year (YoY), while EBITDA grew 11% YoY. Both numbers matched what the brokerage and the broader market had expected.
Furthermore, Adjusted Profit After Tax (PAT) rose 13.6% YoY to Rs 590 crore. On a standalone basis, revenue growth stood at 8.6%. Margins also improved. Gross margin expanded 192 basis points YoY, and EBITDA margin expanded 42 basis points YoY, taking them to 41.1% and 16.8% respectively.
Nuvama on Britannia: Margins improve despite cost volatility
One of the key positives in the June quarter was the improvement in profitability.
The improvement came even as crude oil prices remained volatile. Crude-linked costs are important for consumer companies because several packaging and raw material expenses can be influenced by oil prices.
The Nuvama report noted, “Geopolitical situation in West Asia and volatility in crude oil prices remain key monitorable.”
Nuvama on Britannia: International business shows signs of recovery
Another factor supporting this is the recovery in Britannia’s international business.
The company said the business improved sequentially as supply-chain restrictions eased towards the end of the quarter.
Nuvama noted, “International business recovered sequentially as supply chain constraints eased towards the end of the quarter.”
The company is also seeing stronger activity in e-commerce, while general trade benefited from higher advertising, influencer marketing and promotional spending.
Britannia has also continued to introduce new products and marketing campaigns across brands such as Marie Gold, NutriChoice and Little Hearts.
The company expects revenue growth to remain supported by innovation, brand investments, cost-efficiency measures and an improving domestic demand environment.
What is Nuvama expecting ahead?
The brokerage expects Britannia’s revenue to rise to Rs 26,091 crore by FY29 from Rs 19,152 crore in FY26. Adjusted profit is projected to increase to Rs 3,834 crore during the same period from Rs 2,534 crore. The international business is seen as the fundamental growth driver.
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