KR Choksey's research report on Britannia Industries
Despite a challenging environment, Britannia Industries continued its strong growth momentum in topline growth at 7.6% YoY (domestic sales grew by 8.4% while exports declined by 4.8%), through its healthy mix of a robust portfolio, direct distribution, and enhanced distribution infrastructure. Britannia commenced its journey to become a total food company in 2018 and entered various product categories such as salted snacks, milkshakes, cream wafers, dairy products, value-added dairy products, and croissants incremental volume growth can be expected as distribution of these products increase contribution. However, the contribution from these new categories is still at an embryonic stage. Britannia’s strategy is to focus on value-added products that carry higher margin milk-based drinks, chees, and dairy whiteners. Britannia is working on improving its distribution at a rapid pace, reducing the gap with the top players. Direct reach has increased by more than 26% over the last two years to 2.49mn outlets. the pace is expected to continue at 200k addition per year.
Outlook
We assign 41.7x P/E multiple to FY24E EPS of INR 90.05 and arrive at our target price of INR 3,755 per share with an upside potential of 10.9% from the CMP. Accordingly, we maintain a “ACCUMULATE” recommendation on the shares of Britannia Industries.
More Info
At 13:09 hrs Britannia Industries was quoting at Rs 3,389.95, up Rs 7.90, or 0.23 percent.
It has touched an intraday high of Rs 3,390.35 and an intraday low of Rs 3,354.55.
It was trading with volumes of 14,758 shares, compared to its thirty day average of 22,249 shares, a decrease of -33.67 percent.
In the previous trading session, the share closed up 0.74 percent or Rs 24.85 at Rs 3,382.05.
The share touched its 52-week high Rs 4,152.05 and 52-week low Rs 3,050.00 on 14 September, 2021 and 08 March, 2022, respectively.
Currently, it is trading 18.35 percent below its 52-week high and 11.15 percent above its 52-week low.
Market capitalisation stands at Rs 81,653.15 crore.For all recommendations report, click here
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