Increasing FY21/22/23 EPS estimates by 5.3/0.1/-0.9% on better than expected margin delivery due to benign inputs despite slow recovery in MT, Insti, OOH channels. 3Q revenues grew by 5.7% (4% volume growth) as pantry stoking normalized and transit cluster underperformed. BRIT continues to build on its strategic pillars of 1) innovations 2) affordable packs/pricing (biscuits–Rs5/10 in premium brands) 3) direct distribution (up 16% since March 20) 4) Adjacent product segments (Cake, Cream wafers, salted snacks, milkshakes) 5) cost efficiency programs (Rs2.5bn/1.5-2% of sales) and 6) high growth in Hindi heartland (1.3-1.6x). We expect BRIT to sustain efficiency gains given improvement of 1) 7% in factory productivity 2) 30% in wastage 3) 10% in depot space and 4) increase in direct dispatch from 8% to 22%. We believe launch of family packs in MT and Online and increased growth in segments like Rusk, Cake, Wafers, Croissants and Dairy based drinks will propel growth in coming quarters.
I estimate 24.6% PAT growth in FY21E and 13.9% CAGR over FY20-23. We value the stock at 46xFY23 EPS and arrive at SOTP based target price of Rs4280 (Rs4301 earlier). Retain Buy.
I estimate 24.6% PAT growth in FY21E and 13.9% CAGR over FY20-23. We value the stock at 46xFY23 EPS and arrive at SOTP based target price of Rs4280 (Rs4301 earlier). Retain Buy.
Yorum:
market is moving according to our analysis
