Britannia Industries - Key takeaways from analyst meet :: Anand Rathi

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Britannia Industries
Key takeaways from analyst meet
Britannia’s management talked about the vast opportunities in
packaged foods in India. It also indicated that the company is
poised for strong growth in coming years but was cautious on
margins because of higher raw material prices and intensifying
competition.

 India’s packaged foods doing well. The company indicated that
opportunities in packaged foods are vast. About 9% of food
products in India are branded. With growing food consumption as
well as growing share of branded foods, Britannia sees strong
growth opportunities in coming years.
 Revenue growth intact. It indicated that, huge investments in
ad-spend is resulting in expanding the market. With new products
focusing on health awareness, such as Nutrichoice-biscuits and
Healthy start ready to eat breakfast products, Britannia is confident
of maintaining strong revenue growth in coming years.
 Profitability to be a concern. With mounting competition as
well as higher commodity prices, profitability of the entire sector
has been squeezed. With rising raw material prices and less pricing
power in value-for-money products, Britannia expects profitability
to remain at lower levels than in the past.
 Valuation. We value the stock at a target of `313, at a target PE
of 20x FY12e earnings. Our target PE is at a 25% premium to the
12-month forward Nifty PE.