Nomura has retained a Neutral rating on Britannia Industries, assigning a target price of ₹5,875, which is marginally above the current market price of ₹5,613.00. While the brokerage is optimistic about near-term sales and margin trends, it cited rich valuations as a factor limiting upside potential.
Nomura expects FY26F sales to grow at 9%, driven by a sharp price hike and steady volume growth. The company has managed to maintain consumption momentum despite higher product pricing, reflecting resilient demand.
A moderation in raw material (RM) costs, combined with recent pricing actions, is projected to boost margins from Q2FY26 onward, aiding profitability in the medium term.
However, the stock currently trades at 49 times FY27 forward earnings, a valuation level that Nomura believes caps re-rating potential in the absence of further growth surprises or structural margin expansion.
While Britannia remains a strong player in the packaged foods space, the brokerage suggests investors may wait for better entry points given the limited valuation comfort.
Disclaimer: This article is based on brokerage research and public data. It does not constitute investment advice. Business Upturn and the author do not recommend buying or selling any stock mentioned.
