Accumulate Britannia Industries; target of Rs 6608: Dolat Capital
Dolat Capital recommended accumulate rating on Britannia Industries with a target price of Rs 6608 in its research report dated August 08, 2018.
September 18, 2018 / 01:42 PM IST
Dolat Capital's research report on Britannia Industries
Q1FY19 results came in line with our estimate. The company posted double digit volume growth in the base biscuit business – double digit volume growth in the third consecutive quarter. 130/80bps expansion in GM/EBITDA margin was driven by deflation in key commodity prices. However, flat growth in the IB was disappointing. 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.
We have revised our FY19E and FY20E earnings estimate at ` 101.4 and ` 125.9 respectively considering strong growth in Q1 and expected price hikes. Valuing at 52x FY20E EPS to arrive at a TP of ` 6,608. Maintain Accumulate.
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