Britannia Industries (BRIT IN) – Q4FY26 Result Update – Setback temporary, expect recovery from 2Q – BUY
Published on 08 May 2026
We cut our FY 27/28 EPS estimates by 4.2/ 5.2% due to 1) sales impact in domestic market due to dual pricing issue by competitors, which will get resolved by end of 1Q27 at the earliest 2) although BRIT has realigned production from middle east to Mundra SEZ facility, sales will take time to normalize 3) Increased fuel and packaging costs due spike in crude prices.
Dual price issue (RS5/10 packs) has hurt the company as this segment is 60-65% of volumes and GT has been impacted due to higher profit potential for trade. We note that leading players have started shifting products to Rs10 price point already. We estimate ~1-1.5% sales growth impact due to production issues in Oman and UAE, which should get back in 1Q27 itself. Overall, we expect BRIT to return to double digit topline growth latest by the fag end of 2Q27.
Long term business moat is intact and success of new launches and higher growth in impulse based adjacencies in Qc/Ecom is positive. We estimate sales/EPS CAGR of 10.4/12% for FY26-28 (excluding tax credit impact in FY26). We believe that this is a transition phase and value the stock at 50x FY28 EPS and assign a target price of Rs6441 (Rs6792 earlier). Retain BUY.
