Posted on February 7, 2025, by Niftynews
Shares of Britannia Industries Ltd saw a significant rise of over 2% in early trading on February 7, 2025, following the release of the company’s Q3 earnings. Britannia share price surged 2.41%, hitting ₹5078.80 on the Bombay Stock Exchange (BSE), compared to the previous close of ₹4958.95. The stock’s market capitalization reached ₹1.21 lakh crore, reflecting strong investor confidence after the earnings announcement. The Britannia stock price has gained 4.88% so far this year and risen 9.15% in the past two years. Over the last five years, Britannia shares have increased by 54.55%.
On the BSE, 5603 shares of Britannia changed hands, generating a turnover of ₹2.82 crore. The stock has fluctuated between a 52-week low of ₹4643.30 in April 2024 and a high of ₹6473.10 in October 2024.
Q3 Earnings: Solid Results Boost Britannia Shares
For the December 2024 quarter, Britannia reported a 4.5% year-on-year increase in its consolidated net profit, reaching ₹582 crore compared to ₹556 crore in the same period last year. Additionally, revenue from core operations grew by 6.4%, amounting to ₹4,463 crore, up from ₹4,191.83 crore in the previous year’s third quarter.
However, total expenses in Q3 rose by 9%, totaling ₹3,875 crore, primarily due to the higher costs of raw materials such as wheat and palm oil. Despite these rising costs, the company’s revenue growth remained steady, reflecting its continued dominance in the FMCG space.
Brokerage Outlook on Britannia Stock Price
Following the earnings announcement, several brokerages weighed in on the outlook for Britannia shares.
Goldman Sachs maintained a neutral outlook on the stock, with a target price of ₹5,120. While the global brokerage acknowledged the company’s strong EBITDA performance, it highlighted that the headline earnings were driven by a one-off fall in staff costs. The brokerage also noted the significant impact of rising input costs, which contributed to a decline in Britannia’s gross margins. Although revenue and volume growth were steady, the higher costs may limit further profit growth in the near term.
On the other hand, CLSA was more bullish on Britannia stock, maintaining an outperform rating with a target price of ₹5,891. The brokerage praised the company’s Q3FY25 sales performance, which surpassed expectations. They noted that while input costs increased, Britannia offset these by reducing employee-related costs. CLSA also pointed out that some of Britannia’s adjacent businesses, including dairy drinks, croissants, and wafers, had strong double-digit growth, indicating a healthy product portfolio diversification.
The Future for Britannia Shares
Britannia Industries continues to perform well despite facing challenges with higher input costs. The company’s ability to diversify its product range, including strong growth in categories such as dairy drinks and croissants, supports its long-term growth potential. Additionally, Britannia’s strategic focus on cost control, along with its strong market position in the biscuit and dairy segments, positions it well to weather input cost inflation in the future.
Given the current market conditions and the company’s solid earnings performance, Britannia share price is expected to remain strong, although brokerages indicate some caution due to the margin pressures from rising raw material costs. However, the overall sentiment remains positive, with analysts maintaining a favorable long-term outlook for the company.
Conclusion: Should You Buy Britannia Shares?
Britannia shares have responded positively to the company’s solid Q3 earnings. Despite some short-term challenges related to higher input costs, the stock remains a solid performer in the FMCG sector. With a diversified product portfolio, strong brand presence, and strategic cost management, Britannia continues to be a major player in the industry.
For investors interested in Britannia stock, the positive earnings results and the company’s ongoing market dominance make it an attractive option. While short-term volatility may persist due to rising input costs, the stock remains a strong long-term play for those looking to invest in a leading FMCG firm.
