Britannia gains 5% post Q3 results; Nomura revives 'top-pick' status
The buying on the counter came after Britannia released its Q3FY26 numbers on Tuesday, after market hours.
 "Britannia gains 5% post Q3 results; Nomura revives 'top-pick' status")
Biscuit maker Britannia Industries’ share price gained 4.7 per cent, logging an intra-day high at ₹6,153.95 on BSE. At 9:23 AM, Britannia shares were trading 4.07 per cent higher at ₹6,112.9 per share. In comparison, the BSE Sensex was up 0.17 per cent at 84,413.17. The buying on the counter came after the company released its Q3FY26 numbers on Tuesday, after market hours.
In the December quarter, Britannia Industries reported a consolidated net profit growth of 16.9 per cent at ₹682.14 crore, as compared to ₹582.3 crore a year ago.
The company’s revenue grew 8.2 per cent to ₹4,969.8 crore in Q3FY26 compared to the same period last year. Check detailed results here
Brokerages’ view on Britannia
Nomura said Britannia Industries reported a better-than-expected third quarter, with volume growth of around 4.5 per cent year-on-year (Y-o-Y), compared to its estimate of 2.5 per cent, and margins expanding sharply on the back of benign input costs. The brokerage maintained its 'Buy' rating and top-pick status with a target price of ₹7,000.
Consolidated sales grew 9.5 per cent YoY, ahead of Nomura's forecast of 8 per cent, driven by the better volume performance. However, other operating income declined 70 per cent Y-o-Y due to a reduction in the company's entitlement to state fiscal incentives following goods and services tax (GST) rate cuts. As a result, consolidated revenue growth came in at 7.2 per cent Y-o-Y, marginally above Nomura's estimate of 6.8 per cent, but below the Bloomberg consensus of 8.3 per cent.
Nomura noted that the biscuits portfolio (70 per cent of the business) continued to face GST-led disruption in October, but Britannia reported 12 per cent growth in November and December. Management indicated that the category is still stabilising around price points, with other large biscuit players yet to revert to traditional coinage price points of ₹5/₹10, instead staying at ₹4.5/₹9, which increased competitive intensity during Q3. However, Nomura expects competitive pressure to ease in Q4, which should improve Britannia's volume and sales growth momentum. The brokerage also highlighted that adjacent bakery categories such as Rusk, Wafers, and Croissants maintained strong growth, and Britannia launched new variants including the 50-50 Dipped range, 'Doodh' Marie Gold, and 'Veg' cake during the quarte
Nomura values Britannia at a P/E of 55x on Dec-27F EPS, a 10 per cent premium to its 10-year trading average, citing improving fundamentals and outlook. The brokerage forecasts an earnings per share (EPS) compound annual growth rate (CAGR) of 12.5 per cent over FY26–FY28F. The stock currently trades at 45x Mar-28F EPS. Key downside risks flagged include lower-than-expected volumes and margins.
Meanwhile, according to reports, Morgan Stanley maintained an ‘Equalweight’ rating on Britannia with a target of ₹5,469 per share. The brokerage noted that Britannia reported in line results with steady revenue growth and believes GST-linked fiscal incentives will stay lower going ahead.
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