Britannia share price jumps 5%; CLSA, Phillip Capital, Kotak raise target price

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26 Aug, 2025 12:21

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After hitting a fresh 52-week high of Rs 3,993, shares of Britannia Industries settled 5.26 percent higher at 3,983.25 on BSE on July 20.

The stock got traction after brokerages hailed Britannia's Q1 show as better-than-expected.

Global brokerage firm CLSA maintained an 'outperform' rating on the stock and raised the target price 7.7 percent to Rs 4,200 from Rs 3,900.

As per CNBC-TV18, CLSA has lifted the earnings forecast for 2021 by 18 percent and it sees the company's sales and earnings CAGR of 12 percent and 17 percent over the next three years.

CLSA is of the view that the company's near-term outlook looks robust but valuation offers limited upside.

The company is optimistic about sustaining double-digit category growth in the near-term.

Brokerage firm Phillip Capital has increased EPS estimates for Britannia by 8-12 percent for FY21-22 owing to healthy demand outlook and maintained a 'buy' call on the stock, raising the target price by 12.5 percent to Rs 4,500 (55 times FY22 EPS) against Rs 4,000 (50 times FY22 EPS) earlier.

"We advise investors to increase weight in Britannia, given it fairly insulated from COVID-19 vagaries, only a few companies within FMCG space where almost entire product portfolio is 'essentials' and execution capabilities to deliver market-leading growth," said the brokerage.

"Gross margin expanded about 115 bps year-on-year (YoY) to 41 percent owing to benign input costs and focus on Pareto principle – concentrated on 20 percent of the products/SKUs which in turn contributed 80 percent of the volumes. However, as consumer seeks more varieties/options, it has made available full range of products towards mid-June which should further aid the cause of premiumisation," Phillip Capital said.

Management highlighted that demand momentum has also sustained in the early part of July and expects healthy operating performance to continue until consumers continue to remain indoors.

Kotak Institutional Equities has upgraded the stock to an 'add' from 'reduce', raising the target price by 25.8 percent to Rs 4,150 from Rs 3,300 earlier.

"Britannia delivered a stellar Q1FY21 on the back of lockdowns-led strong momentum for its categories and excellent execution in overcoming logistical challenges. Even as a repeat of Q1 on growth or margins is unlikely, we do believe the super-strong momentum should sustain for at least another quarter or two," Kotak said.

"We raise FY2021-23E revenue estimates by 2-3 percent and margin assumptions by 40-70 bps. The net result is an increase in EPS by 3-5 percent. We revise DCF-based September-2022E fair value to Rs 4,150 from Rs 3,300 earlier, implying a 12-month forward PE of 45 times," Kotak said.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.