Buy Britannia Industries target of Rs 3625: Sharekhan
Sharekhan’s research report on Britannia Industries
Britannia Industries (Britannia) clocked steady numbers in a tough environment with revenue growing by just 6% (driven by 3% volume growth) and OPM improving by 31 BPS to 16.1%. New products continue to perform well and contributed close to ~3% to revenue. Management believes it will take another two quarters for revival in the demand environment; we have reduced our earnings estimates by 2-3% for FY2020 and FY2021 to factor in little lower than earlier expected revenue growth (introduced FY2022 estimates in this note).
The stock is currently trading at 45.4x and 39.7x its FY2021E and FY2022E earnings; we maintain Buy with a revised price target of Rs. 3,625.
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