Britannia shares gain despite UBS cutting target by 11% but says 'buy'

Résumé détaillé

UBS said the Britannia stock has corrected 20% in 2026, so far, over inflation concerns, especially in packaging and fuel, and now trades at 12-month forward price-to-earnings ratio of 39 times, which is 15% below the five-year median multiple.

Shares of Britannia Industries Ltd. gained up to 1.5% on Wednesday, November 11, even as global investment banking firm UBS cut its target price by nearly 11%, but maintained its positive stance on the stock.

UBS has a "buy" rating on Britannia Industries but has reduced its target price to ₹5,800 per share from the previous ₹6,500. This still indicates an upside of 21% from its previous closing price of ₹4,790 per share.

UBS said Britannia's stock return depends on convergence of three cycles — Input costs (whether headwinds are behind, with scope for margin expansion) Demand recovery (whether volume growth trajectory stays resilient), and Valuation (whether it is significantly below earnings cycle peaks).

UBS said the company delivered an 11% volume growth in the first half of the fiscal and still has a good outlook for volume growth, which makes it a favourable context for further upside going forward.

It said the Britannia stock has corrected 20% in 2026, so far, over inflation concerns, especially in packaging and fuel, and now trades at 12-month forward price-to-earnings ratio of 39 times, which is 15% below the five-year median multiple. This makes the stock quite appealing on the valuation cycle front as well, UBS added.

However, the prospect of margin cycle turning favourable has got deferred to the financial year 2028, it said. Nonetheless, continued progress on incremental price increases, towards double-digit earnings growth, could act as a key catalyst for the stock, it added.

Of the 41 analysts who have coverage on the Britannia Industries stock, 32 have "buy" recommendations, seven have "hold" ratings and two have "sell" ratings.

Shares of Britannia are trading 1.2% higher on Wednesday at ₹4,848. The stock is still down 20% so far this year.

Also Read: Outperforming Dhoot Transmission shares worth over ₹850 crore free up today as lock-in ends

Début de l'article, extrait de CNBC-TV18. Pour lire la suite, ouvrez l'article chez le média.