Britannia Industries Ltd. share price target

Brand power, increasing demand in urban and rural market with pickup in economic activities and wide distribution network will drive topline growth in future. The company plans price hikes in some products and reduction in grammage in other products to offset input cost inflation. With promising outlook, we upgrade our rating on the...

Retain HOLD with TP of Rs. 3,700 valuing it at 43x PE its FY24E. Key downside risks to our estimates continued surge in RM prices, demand uncertainty due to 3rd COVID wave.

Profit before tax down 17.37% to Rs 507.09 crore. Provision for tax was expense of Rs 136.22 crore, compared to Rs 161.09 crore. Effective tax rate was 26.95% compared to 26.25%. Minority interest increased 35.69% to Rs -2.00 crore. Net profit attributable to owners of the company decreased 18.56% to Rs 371.18 crore. For year-to-date (YTD) results analysis. Net sales (including other operating income) of Britannia Industries has increased 5.80% to Rs 10585.81 crore. Operating profit margin has declined from 20.03% to 15.60%, leading to...

Inflationary pressure on raw materials is expected to weigh on company's near-term performance. Despite price hikes undertaken to combat inflation, we expect margin to remain under pressure in coming quarters. Maintaining a cautious view, we downgrade our rating to HOLD with a revised TP of Rs. 3,950 based on 43x FY23E adj. EPS. Revenue up 6% QoQ, but PAT slips 1.4% Britannia registered revenue growth of 6.0% QoQ to Rs. 3,554cr in Q2FY22, owing to marginal volume and demand improvements during the quarter, especially in the rural...

Consolidated revenue grew 6%YoY (on a base of 12%YoY in 2QFY21) driven by 6%YoY growth in domestic business while revenue from subsidiaries (consolidated less standalone) declined 5%YoY. BRIT has taken c. 4% price hike during the quarter. In international market; Nepal grew in high double digits led by market share gains. Inflationary raw material impacts operating margins Gross margin contracted 502bp to 37.5% driven by material inflation in palm oil (54%YoY), industrial fuel (35% YoY) and packaging material (30%YoY). EBITDA declined 17%YoY to Rs 5.6bn. Decline in Adjusted PAT at 23%YoY is higher due to Rs...

Downgrade the stock to HOLD (BUY earlier) with revised TP of Rs. 3,775 (Rs. 3,890 earlier) valuing it at 43x PE its FY24E. Key downside risks to our estimates continued surge in RM prices, emergence of 3rd COVID wave impacting demand.

For the quarter ending September 2021, consolidated Net sales (including other operating income) of Britannia Industries has increased 5.51% to Rs 3607.37 crore compared to quarter ended september 2020. Operating profit margin has declined from 19.75% to 15.48%, leading to 17.33% decline in operating profit to Rs 558.33 crore. Raw material cost as a % of total sales...

We are cutting our FY22/23/24 EPS estimates by 8.5%/4.5%/2.5% on account of 1) near term margin pressure on the back of unprecedented inflation and 2) volume pressure due to grammage reduction in price pointed packs (2/3 rd of portfolio). We believe that the margins are near bottom and expect QoQ...

While the prices of raw materials are at multi-year highs (despite flat to lowsingle-digit increases in wheat and sugar costs), ongoing price increases / grammage reduction would support margins going ahead. a) The long-term opportunity in Foods, b) rapid distribution expansion by BRIT, c) success in low-unit packs (LUPs), d) an extremely healthy track record on the topline and earnings, e) ongoing market share gains for several years, f) high ROEs of ~40%, and g) inexpensive valuations of 43.6x FY23E lead us to maintain our BUY rating....