BRITANNIA

a Shares Rally 5% After Strong Q1 FY27 Earnings; Nomura Reiterates 'Buy' with 20% Upside

Summary:

shares surged nearly 5% in Friday's trade, outperforming the broader market after the FMCG major reported a healthy set of Q1 FY27 earnings. The stock climbed to an intraday high of ₹5,660 on the NSE after opening at ₹5,502.50, snapping a three-session losing streak. For the quarter ended June 2026, Britannia posted a 14.1% year-on-year rise in consolidated net profit to ₹593.4 crore, driven by strong volume growth and strategic price hikes. Revenue from operations increased 8% YoY to ₹4,900.9 crore, reflecting steady demand across key categories. The company also reported a sequential recovery in its international business as supply chain conditions improved. Management, however, remains cautious about geopolitical developments in West Asia and fluctuations in crude oil prices, which could impact overseas operations and input costs. Operating performance remained resilient, with EBITDA rising 11% YoY to ₹840 crore, while the EBITDA margin improved 40 basis points YoY to 16.8%. Gross margin expanded 120 basis points YoY to 41.5%, although it moderated on a sequential basis due to higher investments in advertising, promotions, and brand-building initiatives. Brokerage Nomura maintained its 'Buy' recommendation on the stock with a target price of ₹6,500, implying a potential upside of around 20% from the previous closing price of ₹5,404. The brokerage expects a 13% EPS CAGR over FY26–FY29, supported by sustained volume growth, premiumisation, and continued expansion across distribution channels. It noted that elevated marketing expenses weighed on quarterly profitability but viewed them as long-term investments to strengthen future growth. Lower-than-expected volume growth or margin pressure remain the key risks to its outlook. Investment in securities market are subject to market risks. Read all the related documents carefully before investing,