Sharekhan's research report on Britannia Industries
Britannia Industries’ (Britannia’s) underperformance versus broader indices (13% absolute return vs. Nifty return of 34% and Nifty consumption of 26%) in the past one year; leadership position in biscuits category and steady earning visibility make it a better pick in the consumer goods space. Market share gains in biscuits category, strong growth in Hindi-speaking belt, product innovation and a wider distribution network will be key growth drivers in the near to medium term. Strong traction in adjacencies will add to overall revenue growth in near future. Focus on cost-savings helped OPM improve to 16% in FY2020 from 9% in FY2014; going ahead efficiencies, cost saving measures and premiumisation would help OPM to improve to ~20% by FY2023E.
Outlook
Stock trades at 35x its FY2023E EPS, at a discount to some large consumer goods stocks. Current underperformance provides good entry point; we recommend Buy with an unchanged price target of Rs. 4,200.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
