Prabhudas Lilladher has issued a buy rating on Britannia Industries with a target price of ₹6441 in its research report dated May 08, 2026. The brokerage has revised its target price down from the earlier ₹6792, while maintaining its positive outlook on the company. Most analysts continue to recommend 'Buy' or 'Outperform' for Britannia Industries, with average 12-month price targets between ₹6,585 and ₹6,797. The stock dropped nearly 5% on May 8, 2026, after its Q4 FY26 results and dividend announcement.
The research firm has cut FY 27/28 EPS estimates by 4.2%/5.2% due to several operational challenges. According to the report, the company faces dual pricing issues by competitors affecting the domestic market, which is expected to resolve by end of Q1 FY27. Additionally, while Britannia has realigned production from the Middle East to the Mundra SEZ facility, sales normalization will take time. The company is expected to resume double-digit sales growth by the second half of Q2 FY27.
The dual price issue affecting ₹5/10 packs has significantly impacted the company, as this segment represents 60-65% of volumes. As reported by Prabhudas Lilladher, the general trade has been affected due to higher profit potential for trade, with leading players already shifting products to the ₹10 price point. The firm estimates 1-1.5% sales growth impact due to production issues in Oman and UAE, which should recover by Q1 FY27. Despite analyst optimism, Q4 FY26 EBITDA margins slightly declined to 18.1% from 18.2%, showing cost pressures from inflation and rising fuel and packaging costs.
Despite current challenges, Prabhudas Lilladher expects Britannia to return to double-digit topline growth latest by the end of Q2 FY27. The brokerage estimates sales/EPS CAGR of 10.4%/12% for FY26-28 (excluding tax credit impact in FY26). The company is expected to achieve revenue growth of about 11% for 2027 and EPS rising to approximately ₹119. The firm values the stock at 50x FY28 EPS and maintains its buy rating despite the revised target price. However, Britannia currently commands a Price-to-Earnings (P/E) ratio of 51.4x to 57.8x, significantly higher than the Consumer Packaged Goods industry median of 14.8x-16.8x, which increases risk if growth or margins falter.
Despite facing earnings pressures, Britannia Industries announced a final dividend of ₹90.50 per share for FY26, signaling ongoing shareholder rewards. The company maintains a high Return on Equity (ROE) of 57.48% and has a market capitalization nearing ₹1.3 to ₹1.4 trillion. However, competitors such as ITC offer a more attractive valuation, trading at around 26x P/E with a higher dividend yield, highlighting the premium nature of Britannia's current valuation.
