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Buy Britannia, target of Rs 1751: IndiaInfoline
IndiaInfoline has recommended a buy rating on Britannia Industries with a one-year price target of Rs 1751. Net profit for the quarter increased by 54% yoy to Rs 623 million driven by strong revenue growth coupled with higher other income.
IndiaInfoline has recommended a buy rating on Britannia Industries with a one-year price target of Rs 1751 in its May 30, 2008. "Net profit for the quarter increased by 54% yoy to Rs 623 million driven by strong revenue growth coupled with higher other income. Adjusted net profit after VRS cost of Rs 35 million and profit of Rs 22 million from sale of property rose by 53% yoy to Rs 610 million. We expect Britannia to witness a 12.9% CAGR in net profit over FY08-10E."
"Britannia being the largest player in the fast growing biscuits category is the biggest beneficiary of the excise exemption (biscuits priced below Rs 100 per kilogram) on biscuits. We expect, the reduction in excise duty, increasing capacity utilization at Baddi and reduction in pack sizes to drive volumes and result in improved profitability going forward. The company is also looking at new growth triggers like acquisitions in new categories both in India and the overseas market. At the current market price of Rs 1452, the stock is trading at 13.5x FY10E EPS of Rs 107.8. Recommend BUY with a one-year price target of Rs 1751, an upside of 20.6%," says IndiaInfoline's research report.
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