Britannia Share Price Surged after Q1 Results |
Posted: August 9, 2016 |
Britannia share price zoomed almost 9% after posting its Q1 results. The Company registered the sales of Rs. 2196.62 crs for FY 17 Q1 result a marginal jump of 0.35% QoQ from Rs 2188.95 crs. Britannia registered a growth of 11.13% from Rs.259.44 crs to Rs. 288.34 crs. in its operating profit. Company’s revenue soared by 11.23% from Rs. 198.35 crs to Rs. 219.13 crs QoQ. Britannia share price closed at Rs 3,152.15 apiece on NSE up by 8.72 per cent or 51.65 points. The intraday high and the intraday low for today were Rs 3,317.25 and Rs 2,880.10 respectively. Recently the Company has announced that they are planning to enter into newer categories that will create appeal to the youth chairman Nusli N Wadia Said at the company’s 97th annual general meeting held on Monday. The company has not yet given any clarity on its new product; however speculation is that the company may enter in salted snacks, chocolate product, breakfast and ready to eat food. Britannia has 95% of its revenue from the bakery product. Company has gained market share in biscuits segment over its rivals ITC and Parle, company has an expectation to maintain this record. Company is alsao planning to build new plants in several states which will include West Bengal. According to Varun Berry, the Managing Director Commodity prices have strengthened significantly over the last two quarters and the company has initiated a combination of price increase and cost efficiency measures to address this. The Profit of the Company was estimated at Rs 203 crore on revenue of Rs 2,211 crore for the quarter. The category growth remained subdued during the Q1, but Berry is hopeful that a good monsoon as well as the impact of 7th pay commission will aid consumption and boost demand going forward. Share price of the company closed at Rs. 3152, the stock made recent low was at Rs. 2519 which it made on 24th June. 52 high of the stock is at Rs. 3434 (13th Aug 2015) and 52 week low of Rs. 2505 (12th Feb 2016). Britannia is trading at PE multiple of 42.89 where industry PE is 37.14 with its new product in pipeline the company’s sale may improve further and the gap between industry PE and company’s PE may improve with growth in EPS in coming quarters. We suggest buying Britannia with the target of Rs. 3400.
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