EUR 120.00 For Business Accounts Only

MOSL: Morning India (12/February/19): 1. Britannia Inds (Sustained growth with margin improvement); 2. Eicher Motors; 3. Motherson Sumi; 4. Amara Raja Batt; 5. Thermax; 6. TeamLease; 7. Persistent Sys; 8. Insur

MOrning India (12/February/19): 1. Britannia Inds (Sustained growth with margin improvement); 2. Eicher Motors; 3. Motherson Sumi; 4. Amara Raja Batt; 5. Thermax; 6. TeamLease; 7. Persistent Sys; 8. Insurance Tracker

 

Today’s top research idea

Britannia Inds: Sustained growth with margin improvement; Moderate RM inflation outlook

• sales grew 10.7% YoY to INR28.4b in 3QFY19, with base business volume growth of 7% YoY. EBITDA increased 13.4% YoY to INR4.5b, while PAT grew 14.1% YoY to INR3b.
• gross margin expanded 260bp YoY to 41.3%, while EBITDA margin improved 40bp YoY to 15.9%.
• We are enthused about healthy volume growth (despite a high base), rapid distribution expansion, sustained strong growth in the erstwhile weak-performing states and the rapid pace of new launches in biscuits/other packaged F&B products. Continuing premiumization, significant incremental cost savings and a moderate commodity cost outlook relative to earlier years signify bright EBITDA margin prospects.
• We maintain Buy with a TP of INR3,630 - 52x FY21E EPS, a 10% premium to three-year average, with EPS expected to grow faster over FY19-21 (CAGR: 20.1%) than over FY16-19 (12.1%).

Piping hot news

SUUTI plans to sell 3% in Axis Bank for ₹5,300 crore

• The government could rake in at least ₹5,300 crore as the Specified Undertaking of the Unit Trust of India (SUUTI) plans to sell up to 3 per cent stake in Axis Bank via an offer-for-sale (OFS). The floor price for the offer has been set at ₹ 689.52 per equity share of the bank.