Britannia Outperforms Peers
Analysts attribute Britannia’s outperformance to better-than-industry volume growth and a stock re-rating.
Fast moving consumer goods (FMCG) companies have found some favour among investors following first quarter earnings.
A comparison of the market returns of the top five FMCG companies after the first quarter of financial year 2016-17 shows that Britannia Industries has outperformed its peers in the last two months, rising almost 26 percent.
Analysts attribute the outperformance to better-than-industry volume growth and a stock re-rating. The re-rating has helped Britannia catch up with peers in terms of its forward price to earnings ratio.
Britannia currently trades at a forward price to earnings ratio of around 30 times, compared to the industry average of 34-36 times. Seventy-two percent of the analysts tracked by Bloomberg have a buy rating on the stock while the stock is currently trading above its consensus price target of around Rs 3,350.
