Britannia Industries: Target Price Set at Rs 6441 by Prabhudas Lilladher

Britannia Industries Sees Sales Impact Due to Dual Pricing Issue

A recent research report by Prabhudas Lilladher has revised its earnings per share (EPS) estimates for Britannia Industries (BRIT) for the fiscal year 2027-28. The report indicates that the company's EPS estimates have been cut by 4.2% and 5.2% respectively, due to several factors impacting its sales and operations.

The primary concern is the dual pricing issue in the domestic market, where competitors have introduced a pricing disparity of Rs5 and Rs10 packs. This has resulted in a significant sales impact, with the Rs5-10 pack segment accounting for 60-65% of the company's volumes. The report notes that leading players have already started shifting their products to the Rs10 price point, further exacerbating the situation. Additionally, the company's production issues in Oman and UAE, which are expected to normalize by the end of the first quarter of 2027, are estimated to impact sales growth by around 1-1.5%.

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The report also highlights the increased fuel and packaging costs due to the spike in crude prices, which will continue to affect the company's operations. However, Prabhudas Lilladher expects Britannia Industries to return to double-digit topline growth by the end of the second quarter of 2027.

Outlook and Recommendation

The research report estimates a sales growth CAGR of 10.4% and EPS growth CAGR of 12% for the fiscal years 2026-28, excluding tax credit impact in 2026. Based on this analysis, the report values the stock at 50 times FY28 EPS and assigns a target price of Rs6441, down from Rs6792 earlier. The recommendation remains BUY.