KR Choksey's research report on Britannia Industries
BRIT reported revenue of INR 41,968 mn (+17.4% YoY/ -4.2% QoQ). For 9MFY23, revenue grew by 16.0% YoY. EBITDA improved by 51.5% YoY/ 14.9% QoQ to INR 8,176 mn. EBITDA margin saw a sharp sequential improvement of 438 bps YoY/ 323 bps QoQ to 19.5%. Gross margin improved by 574 bps YoY/ 472 bps QoQ. EBITDA for 9MFY23 grew by 22.9% YoY to INR 20,300 mn while EBITDA margin expanded by 93 bps YoY to 16.5%. In Q3FY23, Britannia had an exceptional gain of INR 3,756 mn pertaining to profit on sale of 49% equity stake in Britannia Dairy Private limited to Bel SA and fair valuation of balance 51% stake held in BDPL. Adj. PAT for Q3FY23 was INR 5,568 mn (+49.6% YoY/ +12.9% QoQ). For 9MFY23, Adj. PAT grew by 21.1% to INR 13,876 mn.
Outlook
We apply a P/E multiple of 48.0x to the FY25E EPS of INR 106.1 and arrive at the target price of INR 5,094 per share (earlier INR 4,829 per share); an upside of 10.1% over the CMP. Accordingly, we maintain our “ACCUMULATE” rating on the shares of Britannia Industries.
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