Shares of Britannia Industries Ltd. declined 5% to a day's low of ₹5,525 on Friday, May 8, despite the company reporting a 21% rise in consolidated net profit to ₹678 crore for the fourth quarter of FY26. According to The Economic Times, the stock is among the top losers on the Nifty 500 index, currently trading at ₹5,525 with a 4.5% decline. The stock has also fallen 7.7% so far in 2026. Brokerage firm Morgan Stanley maintains an 'equal-weight' recommendation with a price target of ₹6,019, indicating an upside of 6.5% from the previous closing price. Nomura has a more optimistic outlook, forecasting an EPS CAGR of 11% over FY26-28F and valuing the company at a P/E of 55x on March-28F EPS of ₹132.
The company's revenue performance showed mixed results across different quarters. As reported by The Economic Times, January and February witnessed 9% revenue growth, but March was significantly affected by supply disruptions in the international business due to the West Asia conflict. The company's revenue of ₹4,719 crore for the fourth quarter came in below Street expectations of ₹4,875 crore, representing a 7% revenue growth that fell short of estimates. This quarterly decline contributed to the overall disappointing earnings performance. The business witnessed a steady start to the quarter with 9% growth in the first two months, before moderating to a lower number in March, primarily on account of supply disruptions in the international business following the West Asia conflict.
The company's profitability faced significant pressure during the quarter. According to The Economic Times, the earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 18.2% was down 20 basis points from the previous year and 186 basis points sequentially. The EBITDA of ₹853 crore was also below street estimates of ₹950 crore. However, the company's profit after tax of ₹680 crore was above the CNBC-TV18 poll of ₹666 crore, aided by a lower effective tax rate. The management has already taken measures to mitigate potential input cost pressures from the ongoing conflict. As reported by Morgan Stanley, although gross margins improved year-on-year, they weakened on a quarter-on-quarter basis amid cost pressures.
Despite challenges, Britannia continues to see growth in digital channels and premium products. As reported by The Economic Times, e-commerce now represents 6% of the company's domestic business, driven by e-commerce-first launches and a premium mix of offerings. The company made significant strides in scaling its presence in the rapidly growing e-commerce channel over the year. Among the 40 analysts covering the stock, 32 have a 'buy' rating, six have a 'hold' rating, and two have a 'sell' rating. The company's board has also recommended a final dividend of ₹90.5 per share, reflecting confidence in the company's financial position despite the quarterly performance challenges.
