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Feb 25, 2013, 11.10 PM IST
Britannia Industries, a producer of biscuits, confectioneries and dairy products, gained 1.5 percent on Monday as the research firm Standard Chartered upgraded the stock to an outperform rating with a target price of Rs 590.
"Visibility on margin expansion has improved due to recent price hikes and an improving mix," Standard Chartered reasoned. Britannia Industries' net profit rose by 5.55 percent year-on-year to Rs 57 crore while net sales moved up nearly 17 percent YoY to Rs 1,459.3 crore during the quarter. Brokerage house Angel Broking, in its report, said the modest performance on the bottom-line front was on account of a steep increase in prices of raw materials, hike in freight charges and higher advertisement and promotion (A&P) expenses. "The top-line growth was due to a combination of higher volumes (up 5-5.5 percent YoY), higher pricing (5 percent YoY) and superior product-mix (5 percent YoY). The company’s strategy of extending its brands in premium categories and continuous focus on increasing value-added products in its overall sales mix resulted in better product mix and realization," Angel Broking added. At 10:17 hours IST, share advanced 1.01 percent to Rs 504.80 on Bombay Stock Exchange.
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