Britannia Industries Ltd. share price target

We are upgrading our FY21/22E EPS estimates by 13.4%/6.8% as BRIT seems confident of sustaining growth momentum on back of improved direct distribution in rural (up 15% in 3 months) and weak states, product innovation/launches (Cream wafers, milkshakes, biscuits, lassi), agility to rebound during Covid and cost efficiency measures. BRIT has proved its resilience during testing times and has emerged stronger than ever recording volume growth of 21.5% and 580bps EBITDA margin expansion led by benign input costs, operating leverage, lower product discounts, efficiency in...

Revenue grew by 26%, highest in the past several quarters. Gross margins improved by 124 bps, while OPM improved by 634 bps. Adjacent product categories such as rusk, bread and cheese clocked...

Revenue grew by 26%, highest in the past several quarters. Gross margins improved by 124 bps, while OPM improved by 634 bps. Adjacent product categories such as rusk, bread and cheese clocked...

During FY15-20, Britannia has exhibited remarkable financial performance with Revenue/Net Profit CAGR of 8%/15% respectively. During FY20, the company experienced challenging business environment owing to economic slowdown which was exacerbated by the Covid 19 pandemic. In its Annual Report 2020, Britannia continues to focus on strengthening core brands, launching innovative products,...

Britannia Industries (BRIT), a Wadia Group company is primarily a biscuits company, based in Bangalore. The company's principal activity is manufacture and sale of biscuits, bread, rusk, cakes and dairy products in the domestic and international markets.

Consolidated revenue growth of 2% for the quarter at Rs.2867 crores. Consolidated profit before tax stood at Rs 457.72 crore in Q4 March 2020, rising 1.6% from Rs 449.92 crore in Q4 March 2019. . Net profit was aided by a significant drop in tax expenses. Total tax expenses declined 45.4% to Rs 84.92 crore in Q4 March 2020 from Rs 155.65 crore reported in the same period last year. Consolidate PAT grew by 26% to Rs. 374.76 crore driven by cost efficiency programmes and moderate inflation in raw materials prices, even as revenue grew at a tepid pace....

line. Domestic volume growth was flattish compared to our estimate of mid-single digit growth. Lockdown due to Covid-19 in March impacted the revenue and net profit growth by ~7-10%. Though the sales were significantly impacted due to lockdown, the company was able to improve its overall market share in Q4. With ramp up in production, strong supply chain and distribution initiatives and focused marketing campaigns, company exhibited revenue growth of 20% YoY in April'20 and 28% YoY in May'20....

Britannia Industries (Britannia) registered resilient performance in Q4FY2020 with a revenue growth of 2.5% and stable OPM of 15.8%. Growth surged during January-February period as compared to a ~6% growth for the first nine months of FY2020 mainly on account of market share gains led by strong expansion in the distribution network. However, the lockdown impacted revenues and PAT by 7-10%. After getting requisite approvals, the company started operations in all facilities to fulfil rising demand. It connected with distributors/retailers and ensured continuous supply. This...

efficiency. We believe BRIT will emerge stronger post COVID as strong brands, distribution, more in-house consumption and focus on product hygiene will enable sustain double digit sales growth. BRIT is in a sweet spot as benign input costs (RPO, Milk and Wheat) and strong volumes will enable...

(%) Margins (%) BRIT declared an in-line set of results, but we are pleasantly surprised with the commentary on ~24% avg. The management attributed this growth to high in-home consumption in the lockdown period and BRIT being quicker off the block than peers after the initial COVID-19-led disruption. Two factors highlighted in the post-results call could keep multiple re-rating in check. (a) The management going back on its stated commitment of Inter Corporate Deposits (ICDs) not exceeding INR5b. (b) The company following the policy of not repaying debt while letting the investment book to build up despite a sharp inventory reduction in the past six months. This would lead to consequent concerns over ROCE. While we have revised our FY21 and FY22 EPS by 19.8% and 15.4%, respectively, but valuations fully capture upside at 45.5x FY22 EPS. Standalone sales were flat YoY at INR26.9b.