Sharekhan has given Buy recommendation for Britannia Industries with a target price of Rs. 4000 in its research report issued on May 04, 2022

Sharekhan’s research report on Britannia Industries

Britannia posted strong all-round performance in Q4FY2022 amid tough environment due to slowing demand and rising input prices. Domestic volume growth sustained at mid-single digits. OPM came at 15.5% better than expectations. Company gained market share of 80 bps in last two years to 40% in the core biscuit categories. It is focusing on gaining further share with defined strategies in key markets. Adjacencies and International business to scale-up and will add to topline. Raw material inflation stood at 20% and the company hiked prices by 10% and plans to further undertake calibrated price hikes in the form of grammage reduction and price increases in the coming months. The stock has underperformed the broader indices and trades at 46.0x/ 37.2x its FY2023E/24E earnings, which is at discount to its peers.

Outlook

We maintain a Buy rating on the stock with revised PT of Rs. 4,000.

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