Britannia Industries' strong execution remains a positive, according to brokerage firm Citi which has raised its target on the food company’s shares.
Amid macro challenges, Britannia Industries' strong execution remains a positive, according to brokerage firm Citi which has raised its target on the food company’s shares.
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Citi has upped the target price to Rs 4,350 per share with a "sell" rating. This means it sees a 13 percent upside in the stock from Tuesday’s closing price. On Wednesday, the stock finished 0.38 percent higher from the previous close at Rs 3,840.15 on BSE.
The brokerage expects Britannia’s market share gains shall continue, driven by bottom-up initiatives. It believes that the company could mitigate inflationary pressures via price hikes and cost efficiency measures.
Earlier on September 21, Edelweiss said, rural demand is precarious for Britannia. "We expect rural demand recovery in Q2FY23 as biscuits remain among the few favoured categories due to potential down-trading from street food, spike in travel, and schools making a fullscale comeback. BRIT’s market share gains would thus sustain," it said.
The remarks come ahead of September quarter financial results. In the April to June quarter, the firm’s performance fell short of Street estimates. Steep inflation in raw materials — thanks to a surge in commodity rates — and a contraction in domestic sales volumes hurt its profitability.
Its net profit for the first quarter of the fiscal fell 13.2 percent to Rs 336 crore compared with the corresponding period a year ago.
Earlier this week, Britannia's board elevated Varun Berry to executive vice-chairman and managing director with immediate effect.
The multinational bread corporation also declared Rajneet Kohli's appointment as executive director and CEO, beginning on September 26, 2022. Kohli will report to Berry.
According to news agency Reuters, Kohli’s appointment will be in the form of a newly created CEO role at Britannia. This comes when the industry is grappling with margin concerns amid soaring inflation.