Hold Britannia Industries, target Rs 6306: Karvy Stock Broking Ltd

Karvy Stock Broking Ltd has a hold call on Britannia Industries Ltd. with a target price of Rs 6306. The current market price of Britannia Industries Ltd. is Rs 5965.5 Time period given by analyst is year when Britannia Industries Ltd. price can reach defined target. Britannia Industries Ltd., incorporated in the year 1918, is a Large Cap company (having a market cap of Rs 71698.12 Crore) operating in Food Processing sector.

For the quarter ended 31-03-2018, the company has reported a Consolidated sales of Rs 2509.87 Crore, down -1.89 % from last quarter Sales of Rs 2558.30 Crore and up 12.55 % from last year same quarter Sales of Rs 2230.04 Crore Company has reported net profit after tax of Rs 263.79 Crore in latest quarter.

Investment rationale by Karvy Stock Broking


Britannia, with its improving operational efficiencies and aggressive strategies in expanding its distribution, is moving up the value chain and capturing more market share. At CMP, Rs. 5877 per share, the stock is currently trading at 50.3x FY20E EPS. We value the company at 54.0x FY20E EPS (marginally above the 5 year average 1 year forward P/E) with “HOLD” rating and arrive at target price of Rs. 6306 with an upside of 7%. However, increase in raw material prices and competition from other players will be the key risks to earnings growth.