Reduce Britannia Industries; target of Rs 5500: Emkay Global Financial

Emkay Global Financial' research report on Britannia Industries

With improvement in macro trends, the management is reasonably optimistic about the sector recovery. It endeavors to attain double-digit growth ahead, and expects adjacent business growth at 1-1.5x core-business growth. Price growth is likely to accelerate ahead from ~5.5% in Q4FY25, as new price products land in the market. Given focus on topline, we expect margin to range at 18-18.5% for FY26E, benefitting from the easing in key raw material prices. With 1YF P/E at 53x, above +1 SD 5Y avg at 50x, we see limited upside.

Outlook

We retain REDUCE on Britannia with unchanged Mar-26E TP of Rs5,500, on 48x P/E (in line with its last 5Y forward average P/E).