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The S&P BSE Sensex plummeted nearly 1,000 points, hitting an intra-day low of 80,941.61, amid investor caution ahead of the US Federal Reserve's upcoming meeting. Key factors included a widening trade deficit of $37.8 billion and poor performance from heavyweight stocks like Reliance Industries and HDFC Bank. Despite the overall decline, midcap and smallcap stocks showed slightly better resilience, with only minor losses.
Britannia Industries is positioned as a defensive, long-term investment due to its strong market leadership and extensive distribution network. Despite facing cost inflation that pressures margins, the company is implementing calibrated price hikes to sustain revenue growth. A healthier recovery is anticipated in H2FY25, driven by promising rural trends and an attractive risk-reward valuation.
Indian benchmark indices Nifty and Sensex showed a lukewarm performance on November 27, fluctuating in a narrow range amid losses in realty and pharma sectors. The Sensex rose by 35.28 points to 80,039.34, while the Nifty increased by 5.20 points to 24,199.70, with more shares advancing than declining. Analysts suggest that the markets are likely to consolidate at current levels, with foreign institutional investors shifting from selling to marginal buying, despite concerns over potential tariffs proposed by Donald Trump.
Emkay Global Financial has downgraded Britannia Industries to REDUCE, setting a target price of Rs 5,200, down from Rs 6,750. The company's near-term outlook is weakened by demand slowdown and inflationary pressures, leading to a 9-13% cut in earnings forecasts. Q2 results showed a 4.5% topline growth but a 10% drop in earnings, with operating margins contracting significantly.
Britannia Industries reported a 5% YoY revenue growth in 2QFY25, falling short of the 7% estimate, with an 8% increase in volume. The EBITDA margin declined sharply to 16.8%, impacted by rising employee costs and a contraction in gross margin. The company plans a 4-5% price hike in 2HFY25, while maintaining a Neutral rating with a target price of INR 5,500.
Prabhudas Lilladher has upgraded Britannia Industries to a BUY rating with a target price of Rs 5845, despite reducing FY25-FY27 EPS estimates by up to 10%. The company shows commendable volume growth and strong business prospects, driven by its leadership in the biscuits and bakery sector and a robust innovation pipeline. However, a moderation in volume growth and margins is expected in the coming quarters, with broader performance anticipated to stabilize by the end of Q3 FY25.
The market experienced significant selling pressure on October 25, marking its fifth consecutive decline, with 2,138 shares falling against 376 rising on the NSE. The prevailing trend suggests a bearish outlook, favoring a 'sell on rally' strategy. Vinay Rajani, a Senior Technical and Derivative Analyst at HDFC Securities, provides insights on trading strategies for stocks like Britannia, Karur Vysya Bank, and others.
Nifty tested 24,400 amid market volatility but closed off the day's low, with broader markets facing selling pressure. The NSE advance-decline ratio stood at 2:3, with FMCG, realty, and autos lagging, while banks and pharma gained. Key gainers included Ultratech, Shriram Fin, and SBI, while HUL and Hindalco were among the notable losers.
Britannia Industries Limited
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