Motilal Oswal's research report on Britannia Industries
BRIT topline was in line with our estimates, while EBITDA was 8% ahead of our estimates as margin came in at 19.9%, which is the highest barring the covid period. However, normalizing for the PLI benefits , EBITDA was in line with our expectations. Volumes grew ~2% for the quarter. The company is making investments in both greenfield and brownfield projects to expand its capacities, which would facilitate further growth in volume. The management has indicated that the company has been consistently increasing its market share and much of this is attributed to expanding its distribution reach.
Outlook
Although we like the structural investment case accompanied by healthy return ratios, these are priced in at valuations of ~51xFY24E EPS/~45xFY25E EPS. We reiterate our Neutral stance on the stock with a TP of INR4,600 (premised on 45x FY25E EPS).
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