- Date : 08/11/2022
- Read: 3 mins
Recent performance and future price predictions of Britannia Industries Shares
It was less than a year ago when a Britannia Industries share was trading at around the Rs 3,000 mark. On our last look, it had breached its all-time high to trade at Rs 4,181 per share, buoyed by a steady rise and a surge of over Rs 300 in the last two days. The sudden rise can be attributed to a solid Q2 result that was announced recently.
Britannia posted its highest-ever quarterly revenue as its net profit rose by 8.38% as compared to the same quarter last year. Its profit in Q2 last year was Rs 384.22 crores, compared to Rs 490.58 crores this quarter. The revenue in the same periods was Rs 3,607 crores and Rs 4,379 crores respectively, which is a rise of 21.4%.
The Road Ahead
Britannia MD Mr Varun Berry said that commodity inflation in materials like flour and milk products called for pricing adjustments and intense cost efficiency efforts. This resulted in improved operating margins. The company’s go-to-market strategy and increased distribution chain contributed towards the increase in revenue. Berry also claimed that Britannia is on the path towards more share in the FMCG market, pointing out the company’s consistent performance during the last 10 years. Positive market response and management confidence have encouraged several brokerage firms to raise their thumbs to this stock.
- ICICI Securities improved its rating for Britannia from Hold to Buy. It expects the company to invest in new categories and therefore has set a target of Rs 4350, from the earlier price of Rs 3650.
- Nuvama Institutional Equities are, similarly, positive about the stock and expect new product launches and strong growth. Its target price for the stock is Rs 4620.
- Japanese firm Nomura observes that Britannia’s recent results have surpassed all its competitors in terms of volume growth. The firm believes that Britannia will continue to rise to Rs 4600, upgrading the stock to a “buy” signal.
- JM Financial noted that the company’s financial performance was a surprise but a big positive for its share price future. It is positive at its prospects and expects it to meet the target price of Rs 4210.
Not all brokerage firms are upbeat about the stock’s future price trajectory. There are a few firms who believe that Britannia's share spike has run its course.
- Goldman Sachs is sitting on the fence with Britannia, giving it a relatively “as is” target of Rs 4000. It attributes the surge to the high revenue growth, which maintained momentum despite significant price increases.
- Morgan Stanley sees Britannia as an overweight stock and had maintained a target price of Rs 3892.
- CLSA expects Britannia to underperform from here on. It points out that the shares are at a 15-year high and the recent growth was price driven. It stated that the stock is poised to underperform, giving a target price of Rs 3890.
- Macquarie is lukewarm in its expectations from Britannia. According to them, input cost is a cause of concern, therefore giving the stock a neutral target call of Rs 3750.
Investors would have to evaluate the arguments offered by all leading brokers and do their own research before deciding on the stock.
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