Britannia Inds. (BRITANNIA)

FairStock Score: 62/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Outstanding return ratios: ROE 55.45% and ROCE 52.99%.
• Solid financial health: Piotroski F-Score 8/9, Altman Z-Score 13.73, and free cash flow of ₹2,568 Cr.
• High promoter holding of 50.55% aligns management with shareholders.
• Profit growth of 11.97% is outpacing sales growth of 7.31%, showing operating leverage.
• Latest quarter net profit of ₹682 Cr on sales of ₹4,970 Cr indicates stable earning power.

Concerns

• Extremely expensive multiple: P/E 59.87, P/B 31.36, and EV/EBITDA 62.40.
• Deeply negative margin of safety of -839.80% versus Graham Number of ₹638.70 and DCF value of ₹3,229.07.
• Debt/Equity of 0.59 for a packaged foods major is not negligible.
• Modest growth with 5-year revenue CAGR of 6.44% does not justify a PEG ratio of 11.88.

AI Analysis

Let me think about Britannia the way Graham and I would. First, this is a quality business in every operational sense. Britannia earns an astonishing 55.45% ROE and 52.99% ROCE, and its Piotroski F-Score of 8/9 suggests a financially sound income statement. The Altman Z-Score of 13.73 points to negligible bankruptcy risk. These are the numbers of a dominant branded foods franchise with pricing power. Profit growth of 11.97% on sales growth of 7.31% shows operating leverage, and free cash flow of ₹2,568 Cr gives it real earning power. Promoter holding at 50.55% also keeps management anchored to shareholders. But now the other side: price. At ₹5,670.35, the market capitalisation is ₹1.45 lakh Cr. I am being asked to pay nearly 60 times earnings, 31 times book value, and 62.4 times EV/EBITDA. The PEG ratio of 11.88 is absurd unless you assume growth will explode, and the numbers show steady but not explosive growth. The five-year revenue CAGR is only 6.44%. Graham's number is ₹638.70, and the DCF value is ₹3,229.07. At the current price, my margin of safety is minus 839.80%. That is not investing; that is paying hope as a luxury tax. If I already owned Britannia, I would hold a wonderful business and let compounding work. But as a buyer, I cannot reconcile this valuation with the underlying growth. A great company at a great price is an opportunity; a great company at a very great price is a risk. I would wait for a margin of safety, no matter how good the biscuits taste.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer