Motilal Oswal has given Buy recommendation for Britannia Industries recommended buy rating on the stock with a target price of Rs 3900 in its researc with a target price of Rs. 3900 in its research report issued on May 04, 2022

Motilal Oswal’s research report on Britannia Industries

BRIT’s 4QFY22 result was ahead of our forecasts led by higher-than-expected volume growth of 4% YoY. This was particularly notable given that a majority of the effective 10% price hike during 4Q was backed by grammage reduction. Favorable forward contracts, utilization of lower-cost inventory, and lower ad-spends have played a major role in cushioning margins.

Outlook

We are optimistic on the longer term prospects of BRIT even as near-term challenges on margins remain and group ICDs need to be closely tracked. BRIT’s valuation at 39x FY24E is inexpensive for a business with ~50% ROE and healthy growth prospects. Maintain BUY with a TP of INR3,900.
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