Accumulate Britannia Industries; target of Rs 6350: Dolat Capital

Dolat Capital recommended accumulate rating on Britannia Industries with a target price of Rs 6350 in its research report dated November 13, 2018.

November 19, 2018 / 04:16 PM IST
 
 
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Dolat Capital's research report on Britannia Industries


Q2FY19 results came marginally ahead of our estimate. The company posted 12% volume growth in the base biscuit business – double digit volume growth in the fourth consecutive quarter. 230/100bps expansion in GM/EBITDA margin was driven by deflation in key commodity prices. In addition, strong double digit growth in the IB was encouraging. We believe that the company is on the right track to grow the business and improve profitability with expanding distribution reach, increasing in-house manufacturing and controlling operational overheads. Furthermore, better monsoon this season and changing macros should help.


Outlook


We have tweaked our FY19E and FY20E earnings estimate at ` 99.3 and ` 122.1 respectively to factor in Q2 performance and increase in RM prices. Continue to value at 52x FY20E EPS to arrive at a TP of ` 6,350. Maintain Accumulate.


For all recommendations report, click here


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first published: Nov 19, 2018 04:16 pm

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