Buy Britannia Industries; target of Rs 5060: Sharekhan

Sharekhan's research report on Britannia Industries

The company has entered into a JV agreement with Bel SA, France, to expand its cheese business (likely to grow by 5x over the next five years). With consistent market share gains, good traction to the new launches, deepening penetration in the rural market, and expected recovery of the rural market, the company will continue to achieve volume growth ahead of the industry’s growth in the core biscuit category. As wheat prices continue to remain high, EBIDTA margin will remain subdued in the near term. However, the company has strong drivers in place to achieve margin expansion in the long run.

Outlook

We reiterate our Buy recommendation on Britannia Industries Limited (Britannia) with a revised price target of Rs. 5,060. Strong positioning in the biscuit segment, creating additional growth levers, and strong liquidity position make it a strong play in the large FMCG space.

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Britannia Industries - 28 -12-2022 - share