Broking firm Motilal Oswal believes that the narrative for Britannia is improving, and there is an increasing scope for upside.
"Britannia (BRIT) has been the best performing stock in our Coverage Universe since our 'upgrade to Buy' stance on 24th Feb. Higher in-home consumption may return amid the on-going second wave of COVID presenting a strong case for growth in FY22. Furthermore, agri-based commodity costs remain soft - crucial for a low gross margin business such as that of Britannia.
The high base effect for BRIT would only come into play in 1QFY22, with the base in subsequent quarters becoming far less challenging. The stock trades at 40.7x FY23E - a substantial discount to its historical three- and five-year averages of 46-48x.
Maintain BUY, with revised target price of Rs 4,575 (Rs 4120 earlier), targeting 50x FY23 EPS," the broking firm has stated.
The shares of Britannia Industries was last seen trading at Rs 3,756 on the National Stock Exchange.