MOSL: BRITANNIA INDUSTRIES (Buy)-Topline and margin outlook upbeat
Britannia Industries: Topline and margin outlook upbeat; maintain Buy
(BRIT IN, Mkt Cap USD9.6b, CMP INR5815, TP INR6765, 16% Upside, Buy)
- Britannia Industries reported 12.7% consolidated sales growth to INR28.7b in 2QFY19 (est. INR28.8b). Base business volume growth was around 11% (press release states double-digit volume growth) (est. 10%). Consolidated EBITDA grew 20.3% YoY to INR4.5b (our est. INR4.6b), while consolidated PAT increased 16.2% YoY to INR3b (our est. INR3.2b).
- Consolidated EBITDA margin expanded by 100bp YoY to 15.8%.
- 1HFY19 consolidated performance: Sales, EBITDA and Adjusted PAT grew 12.6%, 19.5% and 17.7% YoY, respectively. EBITDA margin expanded by 90bp YoY to 15.6%. For 2HFY19, we expect sales/EBITDA/Adjusted PAT to grow 10.4%, 13.5% and 14.5% YoY, respectively.
- Conference call highlights: (1) 'Reasonable' momentum in the biscuit market has been maintained, which management expects will continue, (2) Around 5% of sales now emanates from innovation and renovation (products introduced over the past 24 months).
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.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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