Buy Britannia Industries; target Rs 504: Firstcall Research

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Buy Britannia Industries; target Rs 504: Firstcall Research

Firstcall Research is bullish on Britannia Industries and has recommended buy rating on the stock with a target price of Rs 504 in its December 30, 2011 research report.

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Firstcall Research is bullish on Britannia Industries and has recommended buy rating on the stock with a target price of Rs 504 in its December 30, 2011 research report.

"Britannia Industries engages in the production and sale of bakery and dairy products in India and internationally. During the quarter ended, the robust growth of revenue is increased by 18.05% Rs.12956.80 million. Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 19% over 2010 to 2013E respectively. CRISIL has assigned credit rating to Britannia Industries' as AAA rating. Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy products from its associate."

"The company has posted net profit of Rs 378.50 million for the quarter ended Sept 30, 2011 as compared to Rs 318.30 million for the quarter ended Sept 30, 2010, representing rise of 18.76%. Net sales surged by 18.05% to Rs.12956.80 million from Rs.10975.30 million as compared to same quarter last year. Total income has increased from Rs 13051.80 million for the quarter ended Sept 30, 2010 to Rs 11072.40 million for the quarter ended Sept 30, 2011, representing increase of 17.88%. The EPS of the company is stood at Rs.15.84 for each share for the quarter ended Sept 2011."

"At the current market price of Rs.446.25, the stock is trading at 31.38 x FY12E and 27.30 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.14.22 and Rs.16.35 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 19% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 16.71 x for FY12E and 14.81 x for FY13E. Price to Book Value of the stock is expected to be at 8.58 x and 6.53 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 504 for Medium term investment," says Firstcall Research report.

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To read the full report click on the attachment