Britannia Ind rallies over 100% in eight months

The stock zoomed 102% to Rs 973 from Rs 480 on February 28 this year.

Britannia Industries is trading higher by 4% at Rs 950 on reports that the company is planning to sell its bakery foods business.

The stock opened at Rs 917 and touched high of Rs 973, also its new high on BSE. A combined nearly 250,000 shares have changed hands on the counter till 1400 hours on BSE and NSE.

“Biscuits major Britannia Industries is in talks to sell its bakery foods subsidiary Daily Bread four years after the acquisition,” the Times of India report suggests.

Meanwhile, shares of packaged foods maker have appreciated more than 100% in past eight months from Rs 480 on February 28 this year. The BSE benchmark index has gained 11% during the same period.

The company yet to announce its July-September (Q2) earnings, had reported a robust margin expansion in earlier two quarters.

Analyst expects the company's Ebitda (operating earnings) margin is likely to expand by 270 basis points to 7% in Q2, aided by efforts to rationalise costs across operations.

Declining share of Glucose and rising proportion of niche segments like cakes, bread and rusk is improving the margin profile. Input costs of sugar, wheat and palm oil remain favorable in the coming quarters as well, says Amnish Aggarwal, analyst at Prabhudas Lilladher in a note.

The company has also started benefiting from higher in house production post commissioning of three units in the past 18 months and conversion cost has declined by 90bps to 8.2%, which should sustain in the coming quarters as well, added report.