Nestle vs ITC vs Britannia vs Marico: Which FMCG stock to buy before their Q2 results? Target price, earning expectation
Nestle vs ITC vs Britannia vs Marico: Which FMCG stock to buy before their Q2 results? Target price, earning expectation
Nestlé India, ITC, Britannia and Marico are expected to post mixed Q2 FY27 results. Nestlé and Marico may sustain earnings growth, Britannia could benefit from a favourable base, while ITC faces an earnings decline.
Which FMCG stock to buy ahead of Q2 result? Read story to know (AI image for representational purpose)
Nestlé vs ITC vs Britannia vs Marico: Nestlé India, Britannia Industries, ITC and Marico are set to announce their second-quarter results for FY27 in the coming weeks. The FMCG sector is expected to report stronger topline growth in Q2, although growth could moderate somewhat amid margin pressures.
ITC may report a year-on-year decline in earnings, while Nestlé India and Marico are expected to maintain healthy earnings momentum. Britannia, meanwhile, could benefit from a favourable base effect, supporting an improvement in its performance, according to a report by HDFC Securities.
Sustained headwinds led growth moderation, alongside margin strain, could stress FY27 earnings, as per the report.
Nestle vs ITC vs Britannia vs Marico: Q2 result outlook
Nestle’s robust execution is likely to help the FMCG to deliver healthy earnings. The company’s revenue for the quarter is likely to surge 21% on an annual basis and around 7% on a sequential basis.
“We see domestic revenue growth at 20%, with volume growth at ~10%. Real internal growth is likely to be ~14% with 4% mix driven growth. We see domestic price growth to be at~6% for Q2. For international we see another quarter of healthy growth of 35% YoY,” noted the brokerage in its report.
Focus will be on recovery in the cigarettes business. ITC’s gross revenue in the cigarette segment is likely to grow by 74%, which after surge in excise is likely to lead to 20% decline in net sales. “We see 8% volume decline in Q2FY27. The company has achieved 75-80% price hikes, which is likely to help the company achieve EBIT/Stick neutrality,” as per HDFC Securities report.
Low sales are likely to improve net sales growth for Britannia in the second quarter. Inflationary pressures may force the company to focus on price hikes and mix improvements to enhance realisation growth, according to HDFC Securities which expects 13.5% surge in net sales in Q2FY27.
“We see gross margin pressure of 70bps YoY to 41% in Q2FY27E. The company has seen inflationary pressures amid key raw materials like spot sugar prices are up 19% YoY and QoQ, RBD Palmolein prices are up 20% YoY, though flat QoQ,” read the report.
Healthy toplines and better margins are likely to help the company in posting decent growth in Q2FY27. “For the domestic business we see ~12% revenue growth on a high base of 35% growth in Q2FY26. Volume growth is likely to be ~10% YoY in Q2FY27E."
Upside
ITC
Add
300
17%
Nestlé India
Buy
1555
19%
Britannia
Buy
6000
26%
Marico
Add
925
11%
Based on
1 Oct closing price
Based on the target price of these FMCG stock, Britannia Industries has the highest upside.
Nestle vs ITC vs Britannia vs Marico: Q2 result outlook: Stock return
Nestle India share price closed 0.90% lower at ₹1321.10 per share on Monday. The FMCG stock has surged 10.11% in one year, 5.17% in two years, and 14.50% in three years.
ITC share price ended 3.23% lower at ₹257.60 per share on BSE on Monday. Its share price value has declined 36% in one year, 44% in two years and 39% in three years.
Shares of Britannia Industries closed marginally lower at ₹4780 per share on Monday. The stock value has declined 18% in one year, and 20% in two years.
Marico share price ended 0.73% lower at ₹777.40 per share on BSE on Monday. Its share price value has surged 8.9% in one year, 13.40% in two years, and 44% in three years.