Emkay Global Financial's research report on Britannia Industries
Britannia Industries is well-placed in the core biscuits segment and is promptly addressing adjacency gaps, to evolve into a ‘Total Foods Company’. Britannia aspires to clock mid-teen growth, with double-digit growth in Biscuits which, we believe, is possible only post requisite action towards establishing its adjacencies. But given the relentless rural slowdown, we model-in a low 10% revenue CAGR over FY23-26E. We initiate coverage on Britannia with a BUY and Jun-24E TP of Rs5,700/sh, based on 50x PER (~20% premium to its last 10-yr avg fwd PER). With a solid brand price straddle in place, it has been widening product availability with improved distribution, and has bolstered sourcing with an amplified capex cycle. We see the shift from opex to capex aiding earnings. Muted rural demand, inflation and competition are key risks to our call.
Outlook
We initiate coverage on the stock with a BUY recommendation and Jun-24E target price of Rs5,700/share, based on 50x Jun-25E earnings. Our valuation of 50x is at a 20% premium to its last ten-year average forward PER. Valuation premium is justified by the improved execution and positive outlook on adjacencies.
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.
