Britannia Q4 results cheer investors: What should you be doing with the stock?

Britannia Industries, Nestle India, ITC at 52-week high in Monday trade; check details

According to the company, consolidated net profit for FY23 climbed year-on-year (YoY) to 52.3% 2,322 crores. Revenue from operations grew 15.3% year-on-year 16,300.55 crores.

Only volume growth, which was expected to be between 3% and 4% but actually came in at 1% to 2%, fell short of Street expectations.

Global brokerage house JP Morgan has maintained ‘neutral’ rating on the stock, while Morgan Stanley has recommended ‘buy’ rating. Let us see what domestic brokerages have to say about the stock.

ALSO READ: Britannia Q4: Net profit up 47.5% 557 crore, revenue up 13%

Phillip Capital

According to the brokerage house, the stock is a favorite play on India’s food story. The brokerage firm aims to strengthen power brands through innovation, relaunch and premiumisation, improve direct reach, increase share of in-house manufacturing and focus on new categories and adjacencies to drive top line and bottom line growth Continues to support management’s strategy. ,

“We have raised Earnings Per Share (EPS) estimates by 4-5% for FY 24-25 due to strong 4Q results with healthy outlook and maintain Britannia High conviction as ‘Buy’ with target price of Rs. Together The challenges of 5,600 low volume growth are likely to fade away as the RM index is cooling down. In our view, investors with a long-term bias and patience will be highly rewarded,” the brokerage said.

Sharekhan by BNP Paribas

The brokerage said in its research report that the company reported yet another quarter of exceptional results in Q4FY23, beating both its own and the market’s expectations, despite unpredictable commodity prices.

The brokerage has maintained ‘Buy’ rating with a revised target price of Rs. 5,500.

“Britannia has widened the gap with the No. 2 player in the biscuit category and is focused on becoming a formidable player in the bakery and dairy business by adding capacity in key markets. Sustained market share, high traction on product launches and new channel, we expect Britannia’s core biscuit category to beat industry growth in the medium term. The company is going big with the dairy segment, making strong investments on product launches. It is looking to drive revenue growth of adjacent categories and competencies This along with the growth in OI will help Britannia achieve double digit earnings growth of 17% over FY2023-FY2025E,” the brokerage said.

Nuwama Institutional Equities

The company’s Q4FY23 revenue (up 13.3% YoY), EBITDA (up 45.7% YoY), and PAT (up 47.8% YoY) exceeded brokerage expectations. Despite fluctuating demand, the company had volume growth of 2% to 3% YoY and posted its highest ever EBITDA margin of 19.9%. With its solid foundation, the company continues to widen the market share gap over its largest competitor in industries including croissant, dairy and bread.

“Britannia continues to focus on product portfolio expansion as well as enhancing distribution to drive growth. It remains one of our top picks. We expect FY24E/FY25E EPS to reach at target price of 3.4%/5.3%.” % upgrade. 940 (before 5,640). The brokerage said ‘Buy/Hold’.

Kotak Institutional Equities

The company reported 13%-46% year-over-year growth in revenue and EBITDA, driven by strong topline growth, margin expansion and some help from PLI incentives from the previous period. The company is well positioned to deliver strong or resilient volume growth, supported by current Biscuit share gains and pressure from adjacent markets. The stock has been assigned the brokerage’s ‘Add’ rating recommendation.

“The company’s profitability has surpassed pre-pandemic levels by 250-300 basis points, driven by sharp price increases and low-cost inventory relative to peers; it remains to be seen whether this inflationary cycle will push the GM category to 100%.” Triggers permanent extension to -200 basis points We broadly maintain our estimates, rollover and revise fair value 4,950,” the brokerage said.

Elara Securities (India) Private Limited

The brokerage has cut FY24E/25E earnings by 6% each, reiterated ‘deposit’ rating with lower profitability and lower target price. 4,980.