Buy Britannia Industries, target price Rs 4575: Motilal Oswal

Buy Britannia Industries, target price Rs 4575:  Motilal Oswal

Motilal Oswal has buy call on Industries with a target price of Rs 4575. The current market price of Britannia Industries Ltd. is Rs 3740.

Britannia Industries Ltd., incorporated in the year 1918, is a Large Cap company (having a market cap of Rs 89858.33 Crore) operating in FMCG sector.

For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 3248.17 Crore, down -7.00 % from last quarter Total Income of Rs 3492.61 Crore and up 6.57 % from last year same quarter Total Income of Rs 3047.86 Crore. Company reported net profit after tax of Rs 452.62 Crore in latest quarter.

Investment Rationale
Despite (1) ~40% EPS growth likely in FY21, (2) a strong track record of ~20%/27% EPS growth in the preceding 5/10 years ended FY20, (3) an improving outlook for FY22, (4) the best-of-breed structural growth opportunities, and (5) ROE of over 40%, the stock trades at 40.7x FY23E; this is at a substantial discount to its historical three- and five-year averages of 46–48x.

Promoter/FII Holdings
Promoters held 50.6 per cent stake in the company as of Dec 30, 2020, while FIIs held 17.7 per cent, DIIs 10.7 per cent and public and others 21.1 per cent.

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