Britannia's Q1 results trigger diverging brokerage opinions; stock up 2%

Business Standard

3 days ago

Britannia Q1 results review: Shares of Britannia saw buying, snapping three-day day losing streak. The stock fell nearly 7 per cent in three days of the company announcing its Q1 results. However, at 9:20 AM, Britannia shares were trading 1.97 per cent higher at ₹5501.55 per share on BSE. In comparison, the BSE Sensex was down 0.32 per cent at 80,290.07. Brokerages were divided on Britannia after the fast-moving consumer goods (FMCG) company held its conference call on Wednesday, following its Q1 earnings. The company, known for its biscuit brands Jim Jam and Good Day, reported its Q1 results on Tuesday, August 5, 2025, after market hours and held a conference call on Wednesday, August 6, 2025, during market hours.
Britannia earnings call highlights:
Management's agenda is to sustain margins while being competitive.
Management does not see high volatility in commodity prices from here on. They alluded that gross margins will improve on a sequential basis and expect to sustain or improve Earnings before interest, tax, depreciation, and amortisation (Ebitda) margins, as compared to FY25 levels.
In the base quarter, the other operating income was higher, as against current levels; going forward, growth in other operating income will be linear and will not fluctuate any longer.
On the capex front, there are no heavy expansions planned, and an increase in production capacity will only be where it is necessary. Management expects capex of ₹100 crore for FY26.
Check List of Q1 results today
What brokerages suggest on Britannia post Q1?
Nuvama Institutional Equities has raised its target price to ₹6,970 per share from ₹6,770 with a 'Buy' rating. The brokerage reckons revenue growth shall accelerate Q2FY26 onwards, while with a stable stock price, the Sales to Average Retailers (SAR) impact shall be negligible for the remaining three quarters, leading to Ebitda growth with normalised
staff costs.
JM Financial Institutional Securities has also raised its target to ₹6,100 from ₹5,960 with a 'Buy' call. The brokerage suggests any sharp dips should be used as an opportunity to add. It has kept its earnings estimates largely unchanged and will monitor the pace of recovery in volume and gross margin going ahead.
Motilal Oswal has maintained a 'Neutral' rating on Britannia with a target of ₹5,850 per share. The company's focus on innovation, distribution expansion, marketing, pricing actions, Route-to-Market (RTM) 2.0, and dairy capacity expansion is expected to drive growth, according to analysts. With key raw material prices softening and competitive intensity remaining stable in the organised space, Britannia's profitability could see a recovery, similar to the previous inflationary cycle, the brokerage note read.
Conversely, Macquire has maintained an 'Underperform' rating and has cut the target to ₹4,750 per share from ₹4,850, and CLSA has cut its target to ₹5,906 from ₹5,973, according to data compiled by Bloomberg.
Britannia Q1 results recap
In Q1, the biscuit makers' consolidated net profit increased 2.9 per cent to ₹520.72 crore, as compared to ₹505.64 crore year-on-year (Y-o-Y).
Its revenue from operations stood at ₹4,534.86 crore, as compared to ₹4,129.92 crore a year ago, up 9.8 per cent. Its operating profit, however, declined marginally by 0,7 per cent to ₹675 crore Y-o-Y.