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PL Capital Report
Britannia Industries Ltd. shares remained in focus after brokerage firm PL Capital raised its target price on the FMCG major to Rs 6,579 from Rs 6,441, while reiterating its 'Buy' rating following the company's Q1 FY27 earnings performance.
The brokerage remains constructive on the stock, citing healthy demand trends, strong volume growth and continued traction in new product categories.
Britannia reported an 8.2% YoY increase in consolidated revenue to Rs 5,000 crore in the June quarter, while adjusted profit after tax rose 13.4% YoY to Rs 5,950 crore.
Volume growth came in at around 9%, supported by improving demand conditions and the easing of dual-pricing-related disruptions.
According to PL Capital, growth was driven by strong performance across modern trade, e-commerce and quick commerce channels, which expanded at around 2.5 times the pace of general trade. The brokerage also highlighted double-digit growth in Britannia's non-biscuit portfolio, including wafers, rusks, cakes and croissants.
While the brokerage acknowledged rising input costs for sugar, milk, palm oil and fuel, it believes Britannia's long-term business moat remains intact. PL Capital noted that the company has passed on only about half of the cost inflation so far, which could weigh on near-term margins.
Despite margin pressures, the brokerage sees a favorable risk-reward profile and believes the current valuation offers an attractive entry point for investors with a 12-15 month investment horizon. As a result, it retained its 'Buy' recommendation and increased the target price to Rs 6,579.
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