Britannia shares rally 4% as Q1 profit rises 14% YoY. Should you buy, sell or hold?
The shares of Britannia Industries gained 4% to Rs 5,652 on the BSE on Friday after the FMCG major reported a more than 14% year-on-year
The shares of Britannia Industries gained 4% to Rs 5,652 on the BSE on Friday after the FMCG major reported a more than 14% year-on-year rise in consolidated net profit to Rs 593 crore for the April-June quarter of the ongoing financial year 2027, with brokerages maintaining their ‘Buy’ calls for the stock.The company on Thursday released its results for the first quarter of FY27, reporting an 8% YoY rise in revenue from operations to nearly Rs 5,000 crore, from Rs 4,622 crore in the corresponding period of the previous financial year. Its total expenses increased more than 7% YoY to Rs 4,262 crore during the quarter under review.Britannia’s profit margin stood at around 12%, while net sales grew 9.5% YoY to Rs 4,964 crore. The year started with West Asia conflict, leading to a steep increase in cost of fuel and shipment charges across the company’s domestic and international businesses, which Britannia has been able to navigate well during this quarter, delivering a healthy volume and value growth while also gaining ground against competition, with profits growing ahead of topline in double digits over last year, said CEO & MD Rakshit Hargave.“While we continue to closely monitor the evolving geopolitical situation in West Asia and crude oil volatility for potential impact on international operations and domestic input costs, we will remain agile in our actions to deliver healthy, sustainable revenue growth amidst an improving domestic demand environment, driven by sharp innovation, strong brand investments, and disciplined margin management through accelerated cost efficiency initiatives,” he further said.Nuvama on Britannia share priceNuvama Institutional Equities said the company delivered an in-line performance during the first quarter, with margins expanding.
It noted that the FMCG major’s international business recovered sequentially as supply chain constraints eased towards the end of the quarter. Staff costs declined 13.3% YoY and increased 12.6% QoQ, while interest expense declined 12.5% YoY, it noted.The geopolitical situation in West Asia and volatility in crude oil prices remain key monitorables, according to Nuvama, which has a ‘Buy’ call on Britannia Industries shares with a target price of Rs 7,240 apiece, implying around 34% upside potential.Also read | Britannia Q1 Results: Profit rises 14% to Rs 593 crore on volumes, price riseNomura on Britannia share priceNomura said that Britannia’s sales were largely in line with estimates, although EBITDA was a tad below due to higher ad spends. It noted the positive management commentary that highlighted the company ended the quarter with mid-teens growth.“The company also gained market share on a larger scale in e-commerce on the back of continued innovations and higher influencer and A&P spends, as well as robust growth in GT as the regionalisation strategy yielded results.
The BriefWire