Shares of Britannia Industries reached a lifetime high in Thursday's trade, a day after the company posted an over 150% jump in its net profit for Q3.
The stock opened strongly at ₹4,518.95 apiece, up from its previous close of ₹4,370.95, and it surged further to hit a record high of ₹4,596, surpassing its previous high of ₹4,537, set on December 19. The stock maintained the same momentum throughout the day, finishing at ₹4575, up 4.72%.
The company on Wednesday posted a 152% YoY jump in its consolidated net profit to ₹932.40 crore for the December quarter compared to ₹369.18 crore in the year-ago quarter. Sequentially, the net profit was up by 89%.
"The net profit includes an exceptional gain (net of tax) of ₹359 crore, pursuant to a joint venture agreement with Bel SA for the cheese business and the consequent sale of 49 percent equity stake in its subsidiary & fair valuation of the residual stake of 51 percent," the company's earnings statement said.
The revenue from operations during the quarter came in at Rs. 4,196.8 crore, a 17.39 percent rise compared to ₹3,574.98 crore in the year-ago period. The company reported its highest quarterly revenue of Rs. 4,338 crore in the second quarter of the current fiscal year.
The operating profit stood at ₹817.6 crore in Q3FY23, an increase of 33.29% as against ₹539.7 crore in the corresponding quarter of the last fiscal. EBITDA margin came in at 19.48%, up by 438 basis points (bps) from the same quarter last year.
The stock has risen sharply during the last three months, generating a 20.26% return, moving from ₹3,804 apiece to the current price of ₹4,575. Also, it is now trading 50% higher than its 52-week low of ₹3,050.
In addition, the stock was ranked on the sixth spot in the Nifty50 index with a YTD return of 6.17%. On the technical charts, the stock is trading 20% above its 200-day moving average.
On November 29, 2022, the company entered into a joint venture with the French company Bel SA and Britannia Dairy (BDPL) for the development, manufacturing, marketing, distribution, trading, and selling of cheese products in India and certain other countries.
Motilal Oswal said that the JV will enable the company's dairy business to scale up faster than it has in the past. The brokerage said the dairy business constituted a small part of overall sales for the company (Rs. 3.4 billion, or 2.4% of total sales in FY22), and the JV provides additional funding to Britannia's erstwhile 100% owned dairy business and a host of global brands and domain knowledge from Bel’s portfolio.
In October last year, Britannia and Associates (Dubai) Pvt. Ltd. (BADCO), a wholly owned subsidiary of Britannia, acquired a 51 percent equity stake in Kenafric Biscuits Ltd. (KBL). Besides, it also acquired Catalyst Britania Brands Ltd., an investment company that owns the "Britania" trademark in Kenya.
34 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
