MOSL: BRITANNIA INDUSTRIES (Buy)-In line results-FY19 ends with accelerated market share gains
Britannia Industries: In line results; FY19 ends with accelerated market share gains
(BRIT IN, Mkt Cap USD9.6b, CMP INR2786, TP INR3350, 20% Upside, Buy)
- Consolidated sales increased 10.3% YoY to INR28b (v/s our est. of INR27.5b). Standalone sales grew 11.7% YoY to INR26.7b with 7% volume growth in the base business (v/s our est. of +6%). Consol. EBITDA grew 9.9% YoY to INR4.4b (v/s our est. of INR4.4b), while consol. PAT grew 11.7% YoY to INR2.9b (v/s our est. of INR3b).
- gross margin expanded 270bp YoY to 41.2%. Higher other expenses as % of sales (up 320bp YoY to 21.7%) were slightly offset by lower staff costs as % of sales (down 40bp YoY to 3.9%). This means that EBITDA margin was flattish YoY at 15.6% (down 10bp YoY and 30bp QoQ) v/s our estimate of 16.1%.
- FY19 consolidated performance: Sales/EBITDA/Adj. PAT grew 11.5%/15.3%/ 15.2%. EBITDA margin expanded 50bp YoY to 15.7%.
Britannia Industries is a food-products corporation based in India. Co.'s principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. Co. manufactures and distributes products such as biscuits, high protein foods for children as well as digestive-aided ingredients for older adults, convenience foods such as powdered dairy creamers, breads, cookies, snack-cakes and rusk, crackers, cheese, marine products and other related food products. Co.'s brand of products include Tiger, Mariegold, Treat, 50-50, Good Day, Milk Bikis, Little Hearts, Pure Magic, NutriChoice Bread and Milkman.
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