The central thesis is that FY2026 could shape up as another year of relative outperformance for Britannia as multiple growth levers begin to align. After navigating a period marked by input cost volatility and selective price-led growth, the company now appears positioned for a more balanced mix of volume and value expansion.

The brokerage expects underlying growth momentum to gather pace over the coming quarters, supported by stabilising inflation, better demand visibility, and company-specific initiatives aimed at strengthening penetration across price points.

Britannia’s recent performance indicates that the heavy lifting on pricing has largely been completed. As input cost pressures ease, the focus is gradually shifting back toward volume growth, which is a more sustainable driver for long-term value creation in the FMCG space.

The brokerage believes that this transition from price-led to volume-led growth is critical. Volume recovery typically brings operating leverage benefits, supports distribution expansion, and strengthens brand relevance in mass categories like biscuits.

One of the key positives highlighted is the potential benefit from GST reduction in the biscuits category. Any rationalisation of GST rates can materially improve affordability, especially in value and mid-priced segments where demand sensitivity is high.

Lower GST can work as a dual lever. It can directly support consumer demand by reducing effective prices, while also giving manufacturers room to reinvest savings into promotions, grammage, or distribution. For a category as widely consumed as biscuits, even small price adjustments can translate into meaningful volume uplift.

The brokerage also points to the introduction of larger pack sizes as an important catalyst for volume growth. With inflation pressures moderating, consumers tend to shift back toward higher grammage packs that offer better value-for-money.

Larger packs typically support higher offtake per transaction and encourage pantry loading, particularly in urban and semi-urban markets. For Britannia, this strategy aligns well with its strong distribution network and brand trust across households.

Britannia’s strength lies in its focused portfolio, category leadership in biscuits, and ability to adapt pricing and grammage quickly in response to consumer trends. This agility allows the company to protect volumes during downturns and capture upside during demand recovery phases.

In addition, consistent investments in brand building, product innovation, and supply chain efficiency provide a foundation for steady earnings growth, even when the broader FMCG environment turns challenging.

The target price of ₹6,800 reflects expectations of sustained earnings growth rather than a short-term rerating. The brokerage appears comfortable with premium valuations, given Britannia’s predictable cash flows, strong return ratios, and category leadership.

As volume growth accelerates and margins stabilise, earnings visibility is expected to improve further, justifying continued investor interest in the stock as a core FMCG holding.

Key monitorables going forward include the pace of volume recovery, traction from larger pack sizes, and any clarity on GST-related developments. Execution on these fronts could reinforce the outperformance narrative into FY2026.