Buy Britannia Industries, target Rs 3,115: Prabhudas Lilladher
"Britannia is expecting 5-5.5 per cent inflation in input costs; however, selective price increases and cost savings will enable the company mitigate the impact," the brokerage said.
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| Updated: Prabhudas Lilladher maintains a buy rating on Britannia Industries with a 12-month target price of Rs 3,115. Prabhudas Lilladher has slashed its earnings per share (EPS) estimates for FY18 by 3.5-5 per cent due to the management's guidance on tepid demand.
"Britannia is expecting 5-5.5 per cent inflation in input costs; however, selective price increases and cost savings will enable the company mitigate the impact," the brokerage said.
Britannia's stock has taken a hit of 13 per cent this year after being the darling of investors for the better part of 2015.
"We believe that the threat from Patanjali in biscuits is limited, given its poor distribution and indulgence nature of the product. We estimate 15.5 per cent PAT annualised return over FY16-18 and RoE and RoCE of 36 and 61 per cent respectively," it added.
"Britannia is expecting 5-5.5 per cent inflation in input costs; however, selective price increases and cost savings will enable the company mitigate the impact," the brokerage said.
Britannia's stock has taken a hit of 13 per cent this year after being the darling of investors for the better part of 2015.
"We believe that the threat from Patanjali in biscuits is limited, given its poor distribution and indulgence nature of the product. We estimate 15.5 per cent PAT annualised return over FY16-18 and RoE and RoCE of 36 and 61 per cent respectively," it added.
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