Shares of Britannia Industries Ltd jumped as much as 10% to hit a record high of ₹4,181 apiece on the BSE in Monday’s early deals, after the Good Day and Tiger biscuits maker reported late Friday a 28.4% jump in second-quarter consolidated net profit at ₹490.58 crore, helped by volume growth.

The company said it recorded its highest quarterly revenue as its total revenue from operations climbed 21.4% to ₹4,379 crore from ₹3,607 crore a year ago.

“Britannia has seen one of the most resilient (core) performance in the last three years (backed by share gains). Consensus expects Britannia to invest in new categories, till now, pressure on core margins was not providing ammunition. That said, it will now have to re-earn the multiple as consensus was generous in previous re-rating cycle. Going forward, success of new segments and ramp-up of adjacent categories is imperative. The outlook on this appears better,” said brokerage firm ICICI Securities which has upgraded Britannia shares’ rating to ADD and has raised target price to ₹4,300 (from ₹3,650).

Britannia’s volumes, price mix, revenues – all surprised consensus positively. The brokerage believes amidst a not-so-buoyant demand backdrop, it continues to drive market shares gains (15-year high) in weak markets and distribution expansion (rural markets).

Britannia Industries reported a robust set of numbers with revenue and EBITDA beating both our/consensus estimates by 6%/7% and 14%/19%, respectively, as per analysts at another brokerage and research firm Edelweiss, as a positive surprise came from margins with both gross and EBITDA margins growing YoY/QoQ.

“It saw multiple product launches across categories and saw strong growth. Overall, revenue momentum was a positive, led by the biscuits category. This ties up with our anti-consensus stance that biscuits is one of the few categories that is seeing revival in consumption. We continue to remain positive on Britannia,” the note stated. The brokerage house has maintained its Buy rating on the FMCG stock with a target price of ₹4,620 per share.



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