(Rating: BUY, TP: Rs4,290, Upside: 22.6%)
- View - We build in 10% revenue/PAT CAGR over FY21-24E. We upgrade our Rating to BUY from Add with a TP of Rs 4,290 based on 42x FY24E earnings, still a 10% discount to its 5-yr average P/E multiple. A couple more quarters of strong growth delivery should help take the stock back to a 45x earnings multiple, in-line with peers and its historic averages, driving further upside.
- Revenue - Marginal revenue decline of 0.5% (+1% volume growth) on a strong base of 27% at Rs 34bn indicating a strong resurgence in demand coupled with share gains.
- Gross margins - Gross margins plunged 300bps to 38.7% due to sharp inflation in palm oil and crude prices which the company did not fully pass on given the environment.
- Management commentary - Revenue/PAT saw a 24-month growth of 25%/55% indicating strong distribution-led growth, premiumization and cost efficiencies. Company will continue to take calibrated price hikes to pass on the 7-9% inflation. Restarted marketing campaigns and market development efforts on innovations/relaunches.
Shares of Britannia Industries Ltd., was last trading in BSE at Rs. 3571.65 as compared to the previous close of Rs. 3503.75. The total number of shares traded during the day was 31207 in over 3862 trades.
The stock hit an intraday high of Rs. 3580 and intraday low of 3530.1. The net turnover during the day was Rs. 111153077.