Sharekhan is bullish on Britannia Industries has recommended buy rating on the stock with a target price of Rs 4200 in its research report dated July 17, 2020.
Sharekhan's research report on Britannia Industries
Q1FY2020 numbers were strong with revenues growing 26% and OPM stable at 21% (up 634 bps). PAT surged 110% led by strong operating performance, higher other income and lower tax incidence. Hindi-speaking belt performed well with double-digit revenue growth. Adjacent categories (including rusk, bread and cheese) clocked double-digit revenue growth and higher profitability. Sustained demand from in-house consumption and large shift towards branded products and better growth in the rural markets will help Britannia to maintain growth momentum. We have raised earnings estimates by 5% and 4%, respectively, for FY2021 and FY2022 to factor a strong improvement in OPM.
Outlook
We maintain our Buy rating on stock with a revised price target of Rs. 4,200.
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