This FMCG Stock Is A Good Buy, Shown Strong Revenue Growth Across Core Products

Top-line remains resilient supported by mid-single-digit volume growth

According to the brokerage, "It delivered mid-single-digit volume growth, which shows the strength of its brands in different divisions and its channel. Even with the slowdown in the rural markets, Britannia continued to expand its reach in rural markets, which has consistently helped the company gain market share over the years. The company saw E-commerce revenues double from last year. Britannia launched new products like Good Day Harmony, Jeera Marie and Nutrichoice Seeds & Herbs and new variants of Croissant & Wafers to strengthen its product line further. Milk bikis atta are doing well in India with a healthy response from the customers. Britannia relaunched its Dahi brand under the come alive brand name."

Q4FY22 - Result Highlights

• For Q4FY22, Britannia Industries reported revenues at INR 35,505 Mn and reported growth of 13.4% YoY (-0.7% QoQ). For FY22 revenues stood at INR 1,41,363 Mn, up by 7.6% from FY21.
• EBITDA for Q4FY22 stood at INR 5,497 Mn, up of 8.8% YoY (1.8% QoQ) with margins at 15.5% (-66 bps/38 bps YoY/QoQ, respectively). For FY22, EBITDA stood at INR 22,015 Mn with margins at 15.6%, down by 353 bps YoY.
• Net Profit for Q4FY22 increased by 4.1% YoY and 1.6% QoQ to INR 3,788 Mn, with NPM of 10.8% (-95bps YoY). NPM for FY22 decreased by 340 bps to 10.8%. Net profit for FY22 was INR 15,250 Mn, down by 18.1% YoY

Buy for a target price of Rs 3755 per share

The brokerage has said, "The rural demand continues to be weak for the industry due to the slow recovery from covid, but Britannia has continued to gain market share for the 10th consecutive year. It has managed margins well even with the rise in costs of inputs like cashew, palm oil etc. Even with inflationary pressure, the company had a decent Q4FY22 quarter with new product launches that will continue to drive revenue next year. The company will make necessary price hikes if required. Considering all these factors, we apply the P/E multiple of 41.7x to the FY24E EPS of INR 90.05 and arrive at the target price of INR 3,755 per share." The brokerage has recommended 'ACCUMULATE' buy rating on the shares of the comapany.