Sharekhan's research report on Britannia Industries
Britannia’s Q2FY2025 numbers missed expectations due to lower-than-expected OPM at 16.8% (versus expectation of 19%) dragged down PAT by 9% y-o-y. Volume growth sustained at 8% better than large peers. Rural market is growing 2x the urban market. Urban slowdown and inflation might be a risk to near-term volume growth. Focus remains on expanding market share through relevant actions. Price hike of 4-5% will sufficiently cover raw material inflation and help maintain OPM at 18-19%.
Outlook
Stock has corrected by 22% from its high and trades at 55x/47x/42x its FY25E/FY26E/FY27E earnings, respectively. We retain a Buy on the stock with a revised PT of Rs. 5,995.
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