Sharekhan's research report on Britannia Industries
Britannia Industries (Britannia’s) Q1FY2024 results were below our expectation mainly on account of lower-than-expected sales volume growth (stood flat versus 4-5% expected) and OPM at 17.2% versus ~18% expected. Revenue and PAT grew by 8% and 35% y-o-y, respectively. With required grammage corrections and lowering of inflation, Britannia expects the volume growth trajectory to gradually improve in the quarters ahead (expects it to be in high single-digits). Correction in the raw-material prices coupled with cost-efficiency measures and better operating leverage would help OPM to remain at 17-18% in the coming quarters.
Outlook
Britannia’s stock price has corrected by 12% from its recent high and trades at 52x/43x its FY2024E/FY2025E earnings. We maintain our Buy rating on the stock with a revised PT of Rs. 5,415.
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