Britannia Industries shares zoom 10% post Q4 results; what should investors do?
Britannia Industries Ltd on Monday reported an increase of 4.96 per cent in consolidated net profit at Rs 377.95 crore for the fourth quarter ended March 2022.
- May 4, 2022,
- Updated May 4, 2022 11:25 AM IST
Shares of FMCG major Britannia Industries zoomed over 10 per cent to hit an intraday high of Rs 3590.85 on BSE after the company posted better than expected results for the quarter ended March 2022.
Britannia Industries Ltd on Monday reported an increase of 4.96 per cent in consolidated net profit at Rs 377.95 crore for the fourth quarter ended March 2022.
The company had posted a net profit of Rs 360.07 crore in the January-March quarter a year ago, it said in a BSE filing.
Its total revenue from operations climbed 13.40 per cent to Rs 3,550.45 crore during the quarter under review. In the year-ago period, the same stood at Rs 3,130.75 crore. Volume growth came in at 4 per cent against an expectation of 0-2 per cent.
The stock opened higher at Rs 3,330.20 against the previous close of Rs 3,272.65. With a market capitalisation of more than Rs 80,000, the shares stand higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
Long-term investors have made big gains by investing in this FMCG stock as it has surged around 1,100 per cent in the last ten years.
Brokerage firm ICICI Securities said that Britannia continues to report good headline prints – mid-single digit volume growth amidst rural slowdown and inflationary raw material (lower grammage in price point packs implies unit/packs growth would have been higher).
“While FY22 was a weak year in terms of profits (PAT down 18 per cent YoY) due to lower ad-spends in FY21 (driving higher profit growth vs revenue growth), the (revenue) trajectory continues to be healthy (beating expectations). Approach on price increases (inflationary RM) will be key,” it noted.
“We cut our earnings estimates by 7 per cent for FY23-24E; modelling revenue / EBITDA CAGR of 10 per cent / 16 per cent over FY22-24E. Upgrade to HOLD with a DCF-based revised target price of Rs3,350 (was Rs3,200 earlier). At our target price, the stock will trade at 41x Sep’23E EPS. Key upside risk to our thesis is faster-than-expected revenue growth in core biscuits,” it added.
Nomura has maintained a ‘neutral’ rating on Britannia Industries and cut the target price to Rs 3,450 per share. The broking firm noted that the Q4 was marginally better versus estimates. The volumes were holding on, while sharp price hikes drive sales, it said.
Shares of FMCG major Britannia Industries zoomed over 10 per cent to hit an intraday high of Rs 3590.85 on BSE after the company posted better than expected results for the quarter ended March 2022.
Britannia Industries Ltd on Monday reported an increase of 4.96 per cent in consolidated net profit at Rs 377.95 crore for the fourth quarter ended March 2022.
The company had posted a net profit of Rs 360.07 crore in the January-March quarter a year ago, it said in a BSE filing.
Its total revenue from operations climbed 13.40 per cent to Rs 3,550.45 crore during the quarter under review. In the year-ago period, the same stood at Rs 3,130.75 crore. Volume growth came in at 4 per cent against an expectation of 0-2 per cent.
The stock opened higher at Rs 3,330.20 against the previous close of Rs 3,272.65. With a market capitalisation of more than Rs 80,000, the shares stand higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
Long-term investors have made big gains by investing in this FMCG stock as it has surged around 1,100 per cent in the last ten years.
Brokerage firm ICICI Securities said that Britannia continues to report good headline prints – mid-single digit volume growth amidst rural slowdown and inflationary raw material (lower grammage in price point packs implies unit/packs growth would have been higher).
“While FY22 was a weak year in terms of profits (PAT down 18 per cent YoY) due to lower ad-spends in FY21 (driving higher profit growth vs revenue growth), the (revenue) trajectory continues to be healthy (beating expectations). Approach on price increases (inflationary RM) will be key,” it noted.
“We cut our earnings estimates by 7 per cent for FY23-24E; modelling revenue / EBITDA CAGR of 10 per cent / 16 per cent over FY22-24E. Upgrade to HOLD with a DCF-based revised target price of Rs3,350 (was Rs3,200 earlier). At our target price, the stock will trade at 41x Sep’23E EPS. Key upside risk to our thesis is faster-than-expected revenue growth in core biscuits,” it added.
Nomura has maintained a ‘neutral’ rating on Britannia Industries and cut the target price to Rs 3,450 per share. The broking firm noted that the Q4 was marginally better versus estimates. The volumes were holding on, while sharp price hikes drive sales, it said.