BRITANNIA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | BRITANNIA | Market Cap | 1,38,784 Cr. | Current Price | 5,758 ₹ | High / Low | 6,337 ₹ |
| Stock P/E | 60.3 | Book Value | 136 ₹ | Dividend Yield | 1.30 % | ROCE | 56.8 % |
| ROE | 58.0 % | Face Value | 1.00 ₹ | DMA 50 | 5,921 ₹ | DMA 200 | 5,760 ₹ |
| Chg in FII Hold | -0.14 % | Chg in DII Hold | 0.16 % | PAT Qtr | 690 Cr. | PAT Prev Qtr | 498 Cr. |
| RSI | 41.7 | MACD | -53.3 | Volume | 1,34,125 | Avg Vol 1Wk | 5,75,447 |
| Low price | 4,506 ₹ | High price | 6,337 ₹ | PEG Ratio | 5.88 | Debt to equity | 0.66 |
| 52w Index | 68.4 % | Qtr Profit Var | 34.1 % | EPS | 95.6 ₹ | Industry PE | 50.0 |
💹 Financials: Britannia Industries demonstrates outstanding efficiency with ROE at 58.0% and ROCE at 56.8%, reflecting superior capital productivity. Debt-to-equity at 0.66 indicates moderate leverage, manageable but worth monitoring. Quarterly PAT rose from 498 Cr. to 690 Cr., showing a strong 34.1% growth, highlighting robust earnings momentum. EPS at 95.6 ₹ supports strong earnings visibility.
📊 Valuation: The stock trades at a P/E of 60.3, higher than the industry average of 50.0, suggesting premium valuation. The P/B ratio is ~42.3 (5758/136), which is steep. PEG ratio of 5.88 indicates valuations are stretched relative to growth. Dividend yield at 1.30% is decent, offering moderate income return.
🏢 Business Model & Advantage: Britannia operates in the FMCG sector, specializing in bakery, dairy, and packaged food products. Its competitive advantage lies in strong brand equity, wide distribution network, and consistent innovation in product offerings. Demand is supported by rising consumption of packaged foods and premiumization trends in India.
📈 Overall Health: Financially robust with strong profitability, high return ratios, and consistent growth. RSI at 41.7 suggests the stock is approaching oversold territory, while MACD at -53.3 indicates bearish sentiment in the short term. Long-term fundamentals remain intact, supported by brand strength and sectoral demand, though valuations are demanding.
🎯 Entry Zone: Attractive entry around 5,500–5,700 ₹ range, near DMA 200 support levels. Current price of 5,758 ₹ is slightly above fair value. Long-term investors may accumulate gradually, but caution is advised due to premium valuation multiples.
Positive
- Exceptional ROE (58.0%) and ROCE (56.8%) indicate superior capital efficiency.
- Quarterly PAT growth of 34.1% highlights strong earnings momentum.
- Strong brand equity and wide distribution network.
- DII holdings increased by 0.16%, reflecting domestic institutional support.
Limitation
- High P/E (60.3) compared to industry average (50.0).
- High P/B ratio (~42.3) suggests stretched valuation.
- PEG ratio of 5.88 indicates expensive valuation relative to growth.
- Debt-to-equity ratio (0.66) adds moderate leverage risk.
Company Negative News
- FII holdings decreased by -0.14%, showing reduced foreign investor confidence.
- Short-term technical indicators (MACD negative) suggest weak momentum.
Company Positive News
- Quarterly PAT rose from 498 Cr. to 690 Cr., showing strong earnings growth.
- DII holdings increased by 0.16%, reflecting domestic institutional support.
- Strong brand recognition and consistent product innovation.
Industry
- FMCG industry is expanding due to rising consumption and premiumization trends.
- Industry P/E at 50.0 indicates Britannia trades at a premium valuation compared to peers.
Conclusion
Britannia remains a fundamentally strong FMCG company with robust profitability, superior return ratios, and strong brand equity. However, high valuations and moderate leverage limit upside potential. Entry around 5,500–5,700 ₹ is advisable for long-term investors, with cautious accumulation recommended given premium multiples.