HDFC Securities' research report on Britannia Industries
Britannia’s Q4FY23 net revenue grew by 11% YoY vs our expectation of 14%. Volume growth was c.3% (four-year CAGR at 4%). BRIT continued to strengthen its market leadership, led by (1) distribution and marketing initiatives; (2) portfolio innovation; and (3) cost efficiencies. Aided by the softening RM basket and PLI benefits, GM saw a sharp expansion of 690/120bps YoY/QoQ to 44.9% (HSIE 42%)—an all-time high GM. EBITDA margin expanded by 440/40bps YoY/QoQ to 19.9% (HSIE 17.3%). EBITDA grew by 46% YoY (HSIE 27%) to INR 8bn. Adjusting for PLI benefits of INR 900mn, EBITDA and PAT were largely in line with our estimates.
Outlook
BRIT will continue to focus on (1) consistent product launches; (2) distribution expansion; (3) marketing campaigns; and (4) tactical pricing actions to gain market share. We value Britannia at 40x P/E on Mar-25 EPS to derive a target price of INR 4,150. Maintain REDUCE.
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.