Emkay Global Financial is bullish on Britannia Industries has recommended buy rating on the stock with a target price of Rs 3510 in its research report dated June 03, 2020.
Emkay Global Financial's report on Britannia Industries
Results were better than peers and ahead of expectations. While the lockdown had an impact of 7-10% on sales and net profit in Q4, the category has seen a sharp surge in demand from higher home consumption, driving in 20/28% growth in April/May for BRIT. Benefits from higher home consumption and market share gains are likely to sustain in the coming quarters. Our forecasts factor in moderation from Q2, which can see upsides. Given the strong demand, it is now looking at innovations. Increased aggression here will be positive. Commentary was upbeat on margin improvement led by cost savings. We see multiple drivers for margin expansion in FY21 on account of benign input prices, better portfolio mix, reduced competitive activity and cut in discretionary spends.
Outlook
BRIT remains our high conviction Buy; biggest beneficiary of the increased shift towards packaged foods (refer recent update: Keep Munching). Valuations are still attractive relative to peers given, stronger growth momentum with more earnings upsides ahead. We increase estimates marginally and raise TP to Rs3960, based on 47x June-22 EPS.
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.
Read More
