Britannia Industries believes its transformation strategy could accelerate revenue growth by around 300 basis points to a low double-digit compound annual growth rate (CAGR) while keeping margins stable, according to Kotak Securities, which remains positive on the FMCG major's long-term prospects. It also continues to view Britannia as one of its preferred FMCG picks.
The brokerage has maintained its 'Add' rating on the stock and marginally raised its target price to Rs 6,175 from Rs 6,150, saying successful execution of the company's new strategy under CEO Rakshit Hargrave could broaden Britannia's growth profile beyond its core biscuit business.
Kotak said Hargrave is aiming to transform Britannia into a well-rounded foods player over the next three years by accelerating product launches, expanding into higher-margin categories and creating more consumption occasions.
Britannia shares are trading 1.16% higher on Tuesday.
The strategy places a strong emphasis on protein-based offerings, healthier snacks, indulgence products and premium variants across Britannia's portfolio. The company also plans to strengthen flagship brands such as Good Day, Marie Gold and NutriChoice, while expanding its cakes business and introducing cheese-based snacks through its Bel Foods joint venture.
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Moving Online
Britannia is also looking to build products specifically for online and quick-commerce channels, where Kotak believes the company has room to gain market share.
According to the brokerage, these initiatives could help Britannia meaningfully accelerate growth from the 7.9% revenue CAGR delivered over the past five years to a low double-digit growth trajectory, without sacrificing profitability.
Kotak expects premium biscuits — which account for roughly a third of Britannia's biscuit sales — along with adjacent categories such as bakery products, to be key contributors to faster growth. At the same time, it expects the company's core portfolio to continue growing at around 5-6% annually.
The brokerage also said Britannia's near-term outlook appears relatively insulated from raw material inflation after implementing price hikes to offset higher palm oil and wheat costs. It added that the company has regained part of the market share it had lost in wholesale channels after competitor Parle restored several products to lower price points.
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