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Buy Britannia Industries; target of Rs 4780: Sharekhan

Sharekhan is bullish on Britannia Industries has recommended buy rating on the stock with a target price of Rs 4780 in its research report dated November 07, 2022.

November 12, 2022 / 08:49 PM IST
 
 
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Sharekhan's research report on Britannia Industries

Britannia Industries registered robust numbers in Q2FY2023 beating ours as well the street’s expectations, led by a recovery in sales volume growth to mid-single digit while price hikes and efficiencies aided margins to remain high during the quarter. A consistent market share gain in the core biscuits category, sustained distribution expansion, strong traction to new launches and scaling up of adjacent businesses (Croissants - Rs. 150 crore and Wafer - Rs. 100 crore of revenues) will help to maintain consistent double-digit revenue growth in the coming years. Prices of some key inputs such as palm oil have moderated from highs and raw material prices are expected to remain stable in the coming quarters. Thus, margins are expected to stay high in the quarters ahead.


Outlook

Britannia is currently trading at 56x/48x its FY2023/24E. With strong growth levers and earnings growth prospects, we upgrade our rating on the stock to Buy with a revised price target of Rs. 4,780.