Britannia Industries: Sweat cookies

Buiscuit maker Britannia Industries share (up 13.13%) emerged as star performer among FMCG companies on the bourses today. The optimistic sector outlook along with change in management strategy are expected to drive earnings growth in the near term.

The counter is currently benefiting from the value proposition, especially after recent share price decline, attracting investors.
Valuations at 39 times FY22 estimated earnings per share (EPS) are attractive versus peers. Recent price hikes and the company’s strong focus on cost efficiencies point to further margin expansion ahead.

The management has decided to focus on continuous replenishment of inventories and improve distributor health model by improving distribution reach (2.17 million outlets).
Management confirmed its emphasis on process improvement, tightening fixed costs, and reducing wastages yielded margin improvement, during October-December quarter.
Britannia Industries’ Q3FY20 revenues were below, while PAT grew faster than analysts estimates. Reported revenue, EBITDA and APAT grew 3.8%, 11.1% and 24.4%.

Britannia Industries reported a 23.26% jump in consolidated net profit for the December quarter at Rs 369.88 crore as it improved its reach and distribution to parts of the country in the quarter when growth in India’s fast moving consumer goods market remained tepid.

For the three months ended December 31, 2019, the maker of Good Day and Tiger biscuits posted a 5% jump in total revenue from operations at Rs 2,982.68 crores up from Rs 2,842.44 crore it reported in the year ago period.

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