Britannia Industries rallies over 8% post Q2 results; Top pick in FMCG space

 

 

NEW DELHI: Britannia IndustriesBSE 5.50 % Ltd rallied as much as 8.3 per cent in morning trade on Tuesday, after the Kolkata based company reported consolidated 65.68 per cent increase in consolidated net profit at Rs 97.64 crore for the second quarter ended September 30, 2013.

The company had posted a consolidated net profit of Rs 58.93 crore for the same period previous fiscal.

At 09:45 a.m.; Britannia pared some of the morning gains and was trading 5.8 per cent higher at Rs 926.85. It has hit a low of Rs 918.15 and a high of Rs 949 in trade today.

According to analysts, Britannia is one of the better stocks in the FMCG space along with ITCBSE 0.58 % given the fact that it has witnessed strong volume growth at a time when most of its peers witnessed muted growth.

"We have been positive on Britannia for last three months as we see the positive story continuing in the medium term for the company," said Ajay Bodke, Head-Investment Strategist & Advisory, Prabhudas Lilladher.

Top-line growth was driven by superior product mix and higher price realizations. Company's net sales increased to Rs 1,740.48 crore in the July-September quarter, up 12.82 per cent from Rs 1,542.67 crore during the same period last year.

"Our positive stance essentially was based on the fact that the volume growth has been extremely strong along with pricing power coming back to the company. The value added products that the company has been launching have been contributing a higher share of the total revenues and the costs they have been able to keep them under good control," he added.

Bodke is of the view that FMCG is a sector we continue to remain very positive and Britannia and ITC remains our top picks in the sector.

Operating profit margins (OPM) rose by 435 bps on a YoY basis to 8.6% on account of superior mix, better realization and efficient cost management.

Overall expenses during the quarter stood at Rs 1,615.95 crore, up 8.79 per cent as against Rs 1,485.27 crore in the corresponding quarter a year ago

 

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