Britannia Industries Gets Target Price Hike From Goldman Sachs On Positive FY26 Outlook
Britannia's input cost basket, primarily driven by wheat and palm oil, is expected to see some moderation, the brokerage noted.
Goldman Sachs has upgraded its 12-month price target for Britannia Industries Ltd. to Rs 5,650, reflecting a 4.1% upside from its current price of Rs 5,425. This upgrade comes on the back of a positive outlook for the company's performance in FY26.
Britannia Industries has shown a notable acceleration in revenue growth in the fourth quarter of FY25, with consolidated revenue increasing by 9% year-on-year, compared to approximately 6% in the third quarter. This growth was driven by 3.5% volume growth and 5.5% price growth, the brokerage noted.
The company had implemented a series of price increases over the past three months to offset input cost inflation. "The full impact of the price hikes will show up in Q1 FY26," stated the management, Goldman Sachs said.
The company is optimistic about delivering double-digit revenue growth in FY26. Additionally, there has been some improvement in the underlying growth of the FMCG industry in recent months. "Management stated they will look to deliver double-digit revenue growth in FY26," noted the report.
Britannia's input cost basket, primarily driven by wheat and palm oil, is expected to see some moderation. Palm oil prices have decreased by approximately 20%, compared to the average prices in the fourth quarter of FY25, while wheat prices have remained stable. This moderation in input costs is likely to aid in the recovery of gross margins for Britannia in FY26. "The management stated they would look to grow profits ahead of revenues in FY26," highlighted Goldman Sachs.
The non-biscuit segments of Britannia's business, which account for about 25% of its revenue, are growing at a faster rate than biscuits, although still below Goldman Sachs' expectations. Key segments include cake, rusk, bread, and dairy products, with smaller segments such as croissants and wafers. "The growth rates of the overall non-biscuits business is below our expectations as newly emerging packaged foods segments are seeing much higher growth rates," the report mentioned. The management has indicated a focus on scaling up existing segments rather than entering new categories.
