Dolat Capital is bullish on Britannia Industries has recommended buy rating on the stock with a target price of Rs 3782 in its research report dated June 03, 2020.
Dolat Capital's research report on Britannia Industries
Britannia’s revenue and EBITDA were below our estimate, APAT was in line. Domestic volume growth was flattish compared to our estimate of mid-single digit growth. Lockdown due to Covid-19 in March impacted the revenue and net profit growth by ~7-10%. Though the sales were significantly impacted due to lockdown, the company was able to improve its overall market share in Q4. With ramp up in production, strong supply chain and distribution initiatives and focused marketing campaigns, company exhibited revenue growth of 20% YoY in April’20 and 28% YoY in May’20. New product launches and innovations continues to remain the company’s focus. We believe its strategy to grow and improve profitability by increasing in-house manufacturing, launching new value-added products, and controlling operational overheads are likely to yield results.
Outlook
We have maintained our FY21E and FY22E EPS estimate to Rs 68.9 and Rs 75.9 respectively. We value the stock at 50x FY22E EPS, to arrive at a TP of Rs 3,782. Maintain BUY (Buy on dips).
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