Why Britannia Industries share price is rising in a falling market

Britannia Industries share price rose in early trade in an otherwise falling market today after the FMCG firm announced interim dividend for FY2019-20. Share price of Britannia Industries rose up to 3.23% or Rs 291 to Rs 3,043 compared to the previous close of Rs 2,948 on BSE. Britannia stock is trading higher than its 5 day, 20 day, 50 day, 100 day and 200-day moving averages.  While Sensex fell 495 points to 31,367, Nifty dropped 150 points to 9,165.

Britannia Industries stock has lost 1.04% since the beginning of this year and risen 0.66% during the last one year. The stock has gained 26.81% during the last one month.

Total 0.16  lakh shares changed hands amounting to turnover of Rs 4.67 crore on BSE.

Market cap of the firm rose to Rs 71,659 crore.

The biscuit manufacturing firm annnounced an interim dividend of Rs 35 per share for the financial year 2019-20, ahead of its March quarter earnings announcement.

Brokerage firm Edelweiss Securities expects net profit to rise by 1.6 per cent year-on-year (YoY) on 6.9 per cent decline in revenues. The brokerage also sees EBITDA falling 10.10 per cent in Q4.

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HDFC Securities expects Britannia to report 9.5 per cent rise in net profit, while net sales and EBITDA may contract by 2 per cent and 4 per cent YoY, respectively.

Rise in raw material prices, outbreak of coronavirus pandemic amid consumption slowdown is likely to result in single-digit rise in profit for the quarter ended March 2020.

In Q3 of last fiscal, biscuits and bakery products maker Britannia Industries posted a 23.26 per cent rise in consolidated net profit at Rs 369.88 crore in the thirdquarter ended December 2019. The company reported a consolidated net profit of Rs 300.07 crore in the same quarter of last fiscal.

Revenue from operations during the third quarter stood at Rs 2,982.68 crore compared with Rs 2,842.44 crore in the year-ago period.

Axis Securities has given a target of Rs 3,114, an upside of 10% in a time span of 6-9 months.

The brokerage in a report said, "Resilient and diverse product portfolio catering to essential needs and also offering value added products to its consumers ensures. Britannia is insulated to certain extent from coronavirus like pandemic. Further, pressure on cash flows for regional/local players could open up opportunities for the company to gain market share and thereby narrow gap with No. 1 player.

Its strong in market execution capabilities and focus on driving premiumization (though it has been pushed by another 1-2 quarters owing to coronavirus pandemic)are key growth drivers from a long term perspective."

By Aseem Thapliyal