Feb 20, 2013, 01.59 PM IST | Source: Moneycontrol.com

Hold Britannia Industries; target of Rs 540: Sushil Finance

Sushil Finance has recommended hold rating on Britannia Industries (BIL) and has recommended hold rating on the stock with a target of Rs 540 in its February 15, 2013 research report.

Sushil Finance has recommended hold rating on Britannia Industries (BIL) and has recommended hold rating on the stock with a target of Rs 540 in its February 15, 2013 research report.

“BIL’s Standalone Performance: For Q3FY13, its Revenues grew 17.5percent YoY to Rs.14675.8 mn with volume growth of ~5‐5.5percent, price growth of 6‐6.5percent and balance from product mix. EBITDA grew 11.0percent YoY to Rs.924.1 mn with margins of 6.3percent which improved 104 bps QoQ but declined 37 bps YoY on account of 136 bps YoY increase in A&P spend as percent of sales. PAT grew 5.3percent YoY to Rs.569.6 mn with margins of 3.9percent which improved 66 bps QoQ but declined 45 bps YoY. Its PAT growth was lower than EBITDA growth due to lower other income and higher tax rate. It reported EPS of Rs.4.8 in Q3FY13. For 9MFY13, its Revenues grew 12.6percent YoY to Rs.41130.7 mn. EBITDA grew 20.3percent YoY to Rs.2391.6 mn with margins of 5.8percent which improved 37 bps YoY. PAT grew 9.2percent YoY to Rs.1460.1 mn with margins of 3.5percent which declined 11 bps due to lower other income and higher tax rate. It reported EPS of Rs.12.2.”

“For Q3FY13, its consol Revenues grew 16.4percent YoY to Rs.16079.2 mn while PAT grew 11.0percent YoY to Rs.620.7 mn with margins of 3.9percent. It reported EPS of Rs.5.2 in Q3FY13. For 9MFY13, its consol Revenues grew 12.6percent YoY to Rs.44987.3 mn while PAT grew 21percent YoY to Rs.1674.4 mn with margins of 3.7percent which improved 26 bps YoY. For 9MFY13, it reported EPS of Rs.14.0 which is in‐line with our FY13E EPS target of Rs.18.4.”

“Considering BIL’s good 9MFY13 performance, strong brand portfolio, ~1/3rd market share in the branded biscuits, new distributed manufacturing strategy, sales mix improvement, cost cutting initiatives & cash generation from its subsidiaries, we maintain our “hold” rating & target price of Rs. 540 (24.5x its FY14E EPS & its 5 Yrs Avg 1‐year forward PE is 26.2). We believe demand for branded packaged food to increase with a likely increase in discretionary spending going ahead,” says Sushil Finance research report.

FIIs holding more than 30% in Indian cos

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