Britannia Industries’ share price has gained 6% in the past 5 days. Motilal Oswal has upgraded the stock to a Buy with a target price of Rs 7,150. This indicates an upside of around 16% for the share price. The brokerage house said growth visibility is improving for the biscuits major, driven by easing input costs, the GST rate revision in packaged foods, and renewed consumption tailwinds.

Motilal Oswal on Britannia: Focus on volume growth

The note, dated November 10, 2025, Motilal Oswal highlighted that the “company remains focused on driving healthy, volume-led growth through region- and consumer-centric products.”

Britannia expects the transitional GST impact to normalise progressively in the December quarter, with 65% of units already revised to new grammages and prices by October-end. According to Motilal Oswal, “the balance are expected by mid-November. Rural markets continued to outpace urban ones.” t

Motilal Oswal on Britannia: Margin outlook, pricing trend

The brokerage attributed the topline softness to temporary adjustment following the GST rate reduction from 18% to 5% on key food categories which prompted channel recalibration. It said the base business volume declined 3% YoY in Q2FY26 but should rebound once the transitional phase ends.

Gross margin expanded 20 basis points year-on-year and 140 basis points sequentially to 41.7%, aided by stable commodity prices. Operating leverage helped the company deliver a 290bp YoY expansion in EBITDA margin to 19.7%, above Motilal Oswal’s estimate of 17.4%.

“Employee expenses declined 22% YoY on account of SAR devaluation, while other expenses fell 7% YoY,” the report stated, indicating Britannia’s tight cost control. Advertising and promotion spending has been normalised, with A&P as a share of sales expected to revert to historical levels in FY26.

Motilal Oswal on earnings outlook: recovery expected from second half

Motilal Oswal expects Britannia’s earnings growth to improve from 2HFY26 onwards, driven by five main factors:

  1. Improving macro drivers for consumption,
  2. Market share gains as GST rate reduction narrows the pricing gap between organised and unorganised players,
  3. Continued expansion of distribution,
  4. Product innovation as a key impetus, and
  5. Softening of key raw material costs with the “peak cost cycle behind.”

The brokerage models an 11% revenue CAGR and 16% profit growth annually between FY25–FY28. It has also raised its EPS estimates by 3–5% for FY26–FY28, signalling better margin.

“We remain constructive on the packaged food industry, as the GST rate cut from 18% to 5% is expected to boost volume growth. With 60–65% of Britannia’s portfolio comprising Rs 5 and Rs 10 price packs, the company stands out as one of the key beneficiaries of this rate revision,” Motilal Oswal said.

Motilal Oswal on GST rate cut and low-unit packs: key advantage

Motilal Oswal observed that as the pricing gap narrows between branded and unorganised players, market share gains for Britannia is expected to accelerate. It added that consumption recovery in rural areas, which already outpace urban trends, will reinforce growth.

Motilal Oswal noted that the company has normalised its advertising and promotion spending, suggesting the worst of cost tightening is over. It expects EBITDA margins to stabilise near 19% through FY26–FY28.

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Motilal Oswal on valuation metrics and financial snapshot

At a market capitalisation of Rs 1.48 lakh crore, Motilal Oswal noted that Britannia trades at 56.6x FY26 earnings projection and 48.5x FY27 earnings estimates. The price-to-book ratio is expected to decline from 29.0x FY26 estimates  to 19.1x by FY28. 

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For FY26–FY28, the brokerage projects:

Sales to rise to Rs 24,680 crore from Rs 19,770 crore

  • EBITDA from Rs 3,730 crore to Rs 4,770 crore,
  • PAT to increase to Rs 3,460 crore from Rs 2,610 crore 

Motilal Oswal on Britannia: Upgrade to Buy

Summing up, Motilal Oswal said it is “constructive on the packaged food industry” and that Britannia is well positioned to benefit from GST-driven volume expansion. The brokerage upgraded the stock to Buy from Neutral, maintaining a positive stance for FY26–FY28.