Britannia Industries share price tanked 2% to Rs 4,702.60 today after the company posted its fiscal first-quarter profit at Rs 455.45 crore, up 35.7% in comparison to Rs 335.74 crore during the corresponding quarter of FY23, missing estimates. Its revenue from operations stood at Rs 4,010.70 crore, up 8.4% as against Rs 3,700.96 crore during the same period last year. Analysts at Nuvama and ICICI Securities have recommended ‘Buy’ and ‘Add ratings on the stock, respectively. Britannia shares have fallen over 7% in the last one month and have risen 27% in the past one year.
Should you buy, sell or hold Britannia stock?
Nuvama: Buy – Target Price: Rs 5940
“The growth was robust on a YoY basis, but the company missed expectations on profits due to price corrections undertaken during the quarter to tackle renewed local competition. Gross and EBITDA margins expanded 528bp/365bp YoY to stand at 41.3%/17.2%. Britannia continued to display diligent market practices and strong on-ground execution, which reflects in its Rural performance in an overall tepid rural demand. It witnessed robust growth in its focus states as well. Britannia continues to be one of our top picks. Maintain BUY/SO.”
ICICI Securities: Add – Target Price: Rs 5300
“Britannia’s revenue growth of 9% YoY was below our (and consensus) estimates as volumes largely remained flattish with a correction in pricing. The resurgence of local competition with pricing correction means growth has to be largely driven by volumes which could lag due to channel de-stocking and outperformance of local players. Gross margin and EBITDA margin normalised, contracting by 300bps YoY and 270bps QoQ to 41.9% and 17.2%, largely due to some pricing correction and benefits of strategic raw material buying getting over. It continues to drive (1) distribution expansion and (2) strong performance in rural markets and focus states. Going forward, the success of (at least a few) new segments and ramp-up of adjacent categories is imperative. Maintain ADD.”