Low comparables due to the Covid-19-related lockdown in Mar' 20 are likely to drive higher revenue growth of 20-40% across companies in Emkay Global Financial Services coverage universe the brokerage has said.
According to the brokerage firm, recovery and growth in discretionary should remain impressive.
"While staples may record similar sequential trends, alcobev is expected to come back to growth. Fashion retailers are yet to see a full recovery. We expect companies under our coverage to record sales/EBITDA growth of 24%/32% in Q4 vs. 9.6%/9.9% in Q3. In terms of a 2-year CAGR, TTAN, APNT, BRGR, PIDI, VBL and PAG are likely to record high growth of 12-23%. We remain positive on recovery plays and expect the Maharashtra lockdown to be a short-term blip. TTAN, Alcobev stocks (UBBL, UNSP and RDCK), QSRs (JUBI and WLDL), ABFRL and VBL are preferred picks, given likely upgrades to earnings," the brokerage firm has stated.
Within staples Emkay Global likes Britannia, Colgate and ITC. On Britannia, the brokerage believes that growth trends in biscuits may remain muted, with the company likely to record sales growth of 9% (2-year CAGR of 5.8%).
All the three stocks, particularly Britannia Industries has seen considerable traction over the last few months.