Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Britannia Industries - Initiating Coverage - Betting on Premiumization, Distribution and Cost optimization - Reliance Securities

Posted On: 2017-02-23 20:03:56

Market leadership in biscuits, increased premiumization, strong pricing power, improving direct distribution network, and management bandwidth would drive growth for Britannia Industries (BIL), going forward. Varun Berry - who joined BIL as Chief Operating Officer (COO) in Jan''13 and elevated as Managing Director in Apr''14 - has been at the forefront of driving premiumization and cost-optimization strategy as well as increasing BIL''s distribution network. We expect 13% revenue and 16.2% earnings CAGR through FY16-19E and initiate coverage on the stock with BUY recommendation and Target Price of Rs3,796.

Premiumization - The Buzz Word

BIL has been continuously focusing on premiumizing its portfolio over the past three years, which has significantly improved its gross margin profile, apart from benefiting from tailwind in the cost of inputs. With sharp rise in the cost of inputs in recent past, we believe that BIL would be able to maintain and is likely to improve its gross margins, going forward on the back of increased premiumization.

Aggressive Pursuit for Cost Optimization

BIL has seen 25% fall in trade loads, 30% fall in product returns and 75% reduction in wastage through FY13-16. It has focused on consolidating manufacturing facilities in fewer locations than before but on a larger scale, with thrust on placing large manufacturing capabilities closer to the market place instead of being geographically dispersed. This would further enable BIL to keep better control over quality and ensure supply chain efficiencies.

Distribution Network - Building Blocks for Sustainable Growth

BIL has also focussed aggressively on improving its distribution network in last three years. While BIL has strong presence in Southern & Western markets, it is relatively weak in Northern market. Doubling of direct distribution reach to 1.5mn outlets in FY17 from 0.7mn outlets in FY13 has enabled BIL to offer complete portfolio to the retailers and run several activations at retailer level.

Outlook & Valuation

We expect BIL to post consolidated revenues of Rs108.9bn & Rs125.2bn in FY18E & FY19E, respectively, while consolidated PAT is pegged at Rs10.6bn & Rs12.7bn for the same period. We expect BIL''s EBITDA margins to correct in FY17E, following it is expected to improve to 14.8% in FY19E owing to price hikes, recovery in volume growth, increasing premiumization and higher operating leverage. We expect consolidated EPS to be Rs88.1 in FY18E & Rs105.4 in FY19E. Based on current price, the stock currently trades at 36.9x FY18E and 30.8x FY19E earnings. We initiate coverage on the stock with BUY recommendation and Target Price of Rs3,796, which implies an upside of 17% from the current levels.

Shares of BRITANNIA INDUSTRIES LTD. was last trading in BSE at Rs.3236 as compared to the previous close of Rs. 3236.1. The total number of shares traded during the day was 6831 in over 1670 trades.

The stock hit an intraday high of Rs. 3276 and intraday low of 3211.25. The net turnover during the day was Rs. 22222683.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Result Update: Time Technoplast Ltd - ACCUMULATE - TP Rs.210 - Kotak
Result Update: PNC Infratech Ltd - ACCUMULATE - TP Rs.154 - Kotak
Result Update: Praj Industries Ltd - REDUCE - TP Rs.73 - Kotak
Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.741 - Kotak
Result Update: AIA Engineering Ltd - SELL - TP Rs.1130 - Kotak
Result Update: KNR Constructions Ltd - ACCUMULATE - TP Rs.236 - Kotak
Result Update: Finolex Industries Ltd - BUY - TP Rs.712 - Kotak
HSIL Q1 FY18 Result Update Rating - HOLD - Arihant Capital Markets
CEO & MD of Infosys Resigns: Angel Broking
Indoco Remedies: 1QFY2018 Result Update - Angel Broking
Aurobindo Pharma: 1QFY2018 Result Update - Angel Broking
Insurance: Widening the base - Kotak
Banks : NIM-short term tailwinds and cyclical headwinds : Deciphering the cause of recent compression of NIM - Kotak
Jagran Prakashan Q1 FY18 Result Update Rating - HOLD - Arihant capital Markets
NCLT admits RCOM merger petition with Aircel: Angel Broking
Views on Sun Pharmaceutical Industries Limited 1QFY2018 Results: Angel Broking
Economy: RBI surplus transfer: real danger of fiscal slippage - Kotak
Views on Cadila Healthcare Ltd 1QFY2018 Results: Angel Broking
Views on Cipla Ltd 1QFY2018 Results: Angel Broking
The Pitch Report - Result Update: Balmer Lawrie Company - BUY - TP Rs.289 - Kotak
The Pitch Report - BBTC - BUY - TP Rs1130 - Kotak
Result Update: NMDC - REDUCE - TP Rs.130 - Kotak
Result Update: Mahanagar Gas Ltd - SELL - TP Rs.1006 - Kotak
Result Update: Tata Motors - BUY - TP Rs.514 - Kotak
Result Update: Gabriel India Ltd - BUY - TP Rs.190 - Kotak
Initiating Coverage: Radico Khaitan Ltd - BUY - TP Rs.200 - Kotak
Views on Indoco Remedies Ltd 1QFY2018 Results: Angel Broking
Bajaj Auto announces a tie-up with Triumph of UK: Angel Broking
Technology 1QFY18 review: Tactical margin levers exercised well - Kotak
Cement - August 4, 2017 - Kotak
Result Update: JSW Steel Ltd - REDUCE - TP Rs.230 - Kotak
Result Update: Carborundum Universal Ltd - SELL - TP Rs.324 - Kotak
Result Update: Container Corporation of India Ltd - REDUCE - TP Rs.1210 - Kotak
HCL Technologies (HCL IN) - Healthy operational performance - CSEC Research
L&T (LT IN) - Strong PAT growth aided by execution in Infra segment - CSEC Research
GlaxoSmithKline Pharmaceuticals - 1QFY2018 Result Update - Angel Broking
Dr. Reddy's Laboratories - 1QFY2018 Result Update - Angel Broking
Views on Lupin Ltd 1QFY2018 Results: Angel Broking
Tech Mahindra - 1QFY2018 Result Update - Angel Broking
Federal Bank - 1QFY2018 Result Update - Angel Broking
Margin expansion on the cards for SBI: Angel Broking
Views on Tech Mahindra Ltd 1QFY2018 Results: Angel Broking
Views on United Phosphorus Ltd 1QFY2018 Results: Angel Broking
Result Update: Blue Dart Express (BDE) - BUY - TP Rs.5150
Result Update: Escorts Ltd - ACCUMULATE - TP Rs.710 - Kotak
Result Update: The India Cements Ltd - BUY - TP Rs.234 - Kotak
Result Update: Larsen & Toubro Ltd - ACCUMULATE - TP Rs.1274 - Kotak
Result Update: NIIT Ltd - ACCUMULATE - TP Rs.110 - Kotak
Maruti Suzuki - 1QFY2018 Result Update - Angel Broking
Federal Bank Q1 FY18 Result Update Rating - HOLD - Arihant Capital Markets


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017