Britannia shares fall after CLSA downgrades Tiger biscuit maker to 'sell', cuts target by Rs 465
Britannia shares dropped on Monday after CLSA downgraded the FMCG major, whose popular brands include Tiger, Milk Bikis, Good Day, Crackers, NutriChoice and Marie Gold, to 'sell' from 'underperform' citing margin pressure owing to wheat and milk inflation. The brokerage reduced its target price for the Britannia stock by Rs 465.
Britannia shares fell on Monday after a downgrade and a downward revision in target price by CLSA. The brokerage downgraded Britannia to 'sell' from 'underperform' and reduced its target price for the FMCG major to Rs 4,060 from Rs 4,525 citing margin pressure owing to high inflation in wheat and milk. The Britannia stock weakened by as much as Rs 124.4 — or 2.8 per cent — to Rs 4,290 apiece on BSE in morning deals.
Wheat and milk are among the key raw materials Britannia uses to manufacture its products. CLSA reduced its earnings estimates for Britannia for 2023, 2024 and 2025 by 1-11 per cent.
Although CLSA is positive on Britannia's long-term outlook, it highlighted that its stock has run up more than 30 per cent in the past one year.
The rating action on the Bengaluru-based FMCG company — whose popular brands include Tiger, Milk Bikis, Good Day, Crackers, NutriChoice and Marie Gold — comes at a time when major central banks are struggling to curb red-hot inflation without hurting economic growth.
The Nifty50 has risen about 12 per cent during this period.
How brokerages rate Britannia
Brokerage | Rating | Target price |
CLSA | Revised to 'sell' from 'underperform' | Reduced by Rs 465 to Rs 4,060 |
Nomura | Buy | Rs 5,350 |
Axis Securities | Buy | Rs 5,100 |
HDFC Securities | Reduce | Rs 3,800 |
KRChoksey | Accumulate | Rs 5,094 |
Nomura, however, maintained its 'buy' call for Britannia with a target price of Rs 5,350, implying upside potential of 21 per cent from Friday's closing price.
Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
EPFO Pension Schemes: Early pension, retirement pension, nominee pension and 4 other pension schemes that every private sector employee should know
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
SBI 5-Year FD vs MIS: Which can offer higher returns on a Rs 2,00,000 investment over 5 years? See calculations
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
11:22 AM IST