Axis Securities
Britannia (Buy)
Target: ₹4,300
CMP: ₹3,805.45
Britannia Industries has reported a blockbuster performance for Q1FY21, beating ours and consensus estimates by a healthy margin on all key metrics.
The strong volume growth was driven by an excellent execution, category tailwinds and portfolio maximisation. Core EBITDA margins of 21.2 per cent, +644 bps y-o-y expansion were at an all-time high despite a rise in Covid-19 led costs, largely driven by GM expansion, A&P rationalisation, sharp focus on cost savings and operational efficiencies.
EBITDA at ₹717 crore was up 82 per cent y-o-y . Strong operating performance and a lower ETR on a y-o-y basis led to a healthy 115 per cent y-o-y growth in PAT at ₹543 crore against ₹249 crore in Q1FY20.
In the near- to medium-term category tailwinds (led by in-home consumption), distribution penetration, share gains in rural areas and benign RM prices are to keep the growth momentum strong.
Retaining ‘Buy’ with a revised target price of ₹4,300 (₹3,877 earlier) at 50x FY22 EPS.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.