The profit includes an exceptional gain of Rs 359 crore, with respect to a JV with Bel SA for the cheese business and the consequent sale of a 49% equity stake in its subsidiary and a fair valuation of the residual stake of 51%
CSLA has downgraded the FMCG company to “Sell” with a target of Rs 4060. The stock was last trading at Rs 4,315, down 2.18% from the previous day’s close.
The top-line growth is likely to be driven by volumes, CSLA said, while slashing FY23-25CL earnings by 1-11%. So far this year, the stock gained by a marginal 0.58% and is up 19% in the last six months.
The company has seen better-than-expected performance in the third quarter as the company’s net profit rose 150% year-on-year (YoY) to Rs 932 crore, while sales grew 16% over the previous year.
The profit includes an exceptional gain of Rs 359 crore, with respect to a JV with Bel SA for the cheese business and the consequent sale of a 49% equity stake in its subsidiary and a fair valuation of the residual stake of 51%.
Britannia earlier said its pricing actions and intensified cost efficiency programme helped it mitigate inflation in the previous quarter.
The company’s management highlighted a continued increase in market share with a growing gap versus its rival Parle while remaining confident about managing the pockets of competition through pricing actions.
On the back of opportunistic buying and moderation in inflation, Britannia’s operating margins improved by 330 basis points.
Post the quarterly results, the company received upgrades in earnings estimates from Sharekhan for FY24 and FY25. Meanwhile, Jefferies also upgraded the company’s earnings.
According to Trendlyne data, Britannia has an average target of Rs 4638, which represents an upside of 7.62% from the current levels.
The company said it is being vigilant of the competitive actions in the marketplace and that it would deploy appropriate pricing actions to drive market share.
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