Britannia Industries (BRIT IN) – Q1FY27 Result Update – Demand trends healthy, Input cost inflation a concern – BUY
Published on 07 Aug 2026
We change our FY27/FY28 EPS estimates by -1.7%/2.1%, showing impact of 1) strong demand outlook given 9% volume growth in 1Q27 2) 2.5x growth in MT, Ecom, QC over GT growth with superior mix 3) double digit growth in wafers, rusk and cakes and 30% growth in croissants 4) input cost inflation in sugar, palm oil, milk and fuel costs.
The long-term business moat remains intact, while the success of new launches and healthy traction in impulse-led adjacencies across QC/e-com. BRIT is facing input cost inflation across most ingredients and has been able to pass on only 50% of the cost inflation so far. We expect YoY lower margins in 2Q/3Q given high base of 19.5/19.7 (Writeback of phantom stock options and higher GM) which will curtail near term growth. We expect EPS growth of 5.2%/17.3% in FY27/28 showing impact of lower margins and tax writeback in FY27. BRIT trades at 41.1xFY28 EPS which provides a good entry point for 12-15 months perspective. We value BRIT at 50x FY28 EPS and assign a TP to Rs6,579 (vs. Rs6,441 earlier). Retain BUY.
