Britannia Industries Ltd. share price target

Decelerated revenue growth due to slow demand environment Revenue for Q2FY20 stood at Rs 3,023cr (5.9% YoY), reaching the Rs. 3000cr benchmark for the first time. However, 24 month growth in Q2FY20 has fallen to 19% against the base of 21% in Q2FY19 due to tough demand scenario. Britannia has managed to increase its market share and further widened the gap between it and the competitors through innovation and launch of new products across various portfolios. The overall commodity inflation remained moderate at 3%, despite huge inflation of 14% in flour, 37% in milk and 1% in sugar which was offset by the deflation of 13% in...

Britannia delivered a modest quarter with in-line revenue versus our estimates for quarter 7% YoY growth amid slowdown challenges. Volumes reported a 3% growth (in-line with estimates) on the back of high base and weak demand conditions.

Sequentially, revenues of the firm have risen by 12.91% from Rs 2700.35 crore in Q1 June 2019. The company's total expenditure rose by 6.64% to Rs 2617.64 crore in Q2 FY20 from Rs 2454.58 crore in Q2 FY19. Total cost of raw materials consumed, which represented nearly 60% of the total expenses of the firm, increased by 8.43% to Rs 1559.95 crore in Q2 September...

Although BRIT is underperforming other FMCG cos in the near-term, medium term opportunity makes the story attractive. We believe BRIT can successfully become a total snacking company as it has all the right ingredients i.e. brand strength, deep distribution, superior management execution and operating scale. Besides, we expect BRIT to continue gaining share in biscuits led by premiumisation and distribution expansion in Hindi belt. BRIT has reduced its ICD's to its group companies to <Rs 5bn vs. ~Rs 7bn in Mar-19. BRITs 2Q performance was soft and in-line (after miss in 1QYF20). Co has underperformed peers (HUL, Dabur etc) in 1HFY20 owing to slowdown in biscuit category growth. However, market share gains and promising new launches keeps us interested. We expect gradual recovery in 2HFY20. We cut estimates by ~2% to factor delay in full recovery (1Q onwards vs. 4Q earlier). We value BRIT at 45x P/E on Sep-21E EPS, arriving at a TP of Rs 3,513. Maintain BUY.

Britannia Industries registered steady performance in the backdrop of tough demand, with revenue growing by 6.2% (driven by volume growth of 3%) and a 31 bps rise in OPM to 16.1% (better than our expectation of 14.5%). New products (3% of overall sales) are performing well and gaining good acceptance in the domestic market. Most of the new products launched in recent times are gross margin accretive. The revenue mix between biscuit and non-biscuit products will reduce to 70:30 from 75:25 earlier over the next 2-3 years....

We retain positive view on BRIT despite near term growth headwinds given that the company remains on track with its strategic plans and milestones like 1) distribution expansion in Rural India and Hindi heartland 2) Innovation and renovation of Biscuits portfolio 3) Initial success in cream wafers,...

Britannia Industries Limited is a food company, which is engaged in the manufacture of biscuits, cakes and rusks. The Company operates through the Foods segment, which comprises bakery and dairy products. The Company's product brands under biscuits category include Good Day, Crackers, Nutri Choice, Marie Gold, Tiger, Milk Bikis, Jim Jam- Treat, Bourbon, Little Hearts, Pure Magic and Nice Time. Its products under diary category include Cheese, Fresh Dairy and Accompaniments. Its products under cakes category include Bar Cakes,...

Britannia delivered a weak and below estimates quarter on all fronts led by revenue weakness led by slowdown in the category. Volumes reported a 3% growth vs 7% reported in past two quarters.

Britannia Industries Ltd. reported Q1FY20 results with net revenue of `2677crs with the growth of 6%. EBIDTA grew by 1.4% Y-O-Y to `395 crs. EBITDA margins contracted by 70 bps to 14.6% in Q1FY20. Volumes and price contributed 3% each to the growth. The company continued to focus on expanding distribution reach in the urban and rural market, increasing...

Q1FY20 revenue grew only by 5.9% YoY to Rs. 2,677cr with half of the growth on account of volume growth and the other half attributable to price increase. The topline growth faced headwinds from slowdown in the economy, and sluggish demand especially in the rural areas. EBITDA increased 7.1% YoY in Q1FY20 to Rs. 462cr, while margins improved by 19bps YoY. The growth in margins were mainly on account of moderate inflation (~4%) of raw materials, which was in turn due to their long positions in some of the commodities like flour. PAT declined 2.8% YoY to Rs. 251cr, affected by exceptional expense of Rs. 16cr incurred by the company for its VRS...