will government's massive surge in investment ... - Myiris.com

Apr-Jun 2013 Earnings Preview
Britannia Industries
Rating
BUY
Price (Rs) 669
Target Price (Rs) 812
M/Cap (Rs bn) 79.9
Shares o/s (m) 119.5
We expect Britannia to report a 13.5% increase in sales to Rs13.9bn, led by 6%
volume growth. Gross margins are expected to remain flat as fall in price of palm oil
is offset by an increase in Wheat flour prices YoY. EBITDA is expected to grow by
35% as margins expand 110bps to 7% due to gains from operating leverage. 80bps
increase in tax rate to 28.9% will curtail PAT at Rs589m, a growth of 35% YoY.
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 56,155 65,006 75,849
EBITDA 3,716 4,770 5,976
Margin (%) 6.6 7.3 7.9
PAT 2,339 2,950 3,846
EPS (Rs) 19.6 24.7 32.2
Growth (%) 15.8 26.1 30.4
RoE (%) 40.2 41.4 43.7
PE (x) 34.2 27.1 20.8
P / BV (x) 12.4 10.2 8.2
EV / E (x) 21.6 16.5 12.8
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 13,948 12,289 13.5 15,024 65,006 56,155 15.8
EBITDA 976 723 35.0 1,319 4,770 3,716 28.4
Margin (%) 7.0 5.9 111 bps 8.8 7.3 6.6 72 bps
Reported PAT 589 435 35.5 878 2,950 2,339 26.1
PAT (Excl. Ex Items ) 589 435 35.5 878 2,950 2,339 26.1
Colgate Palmolive
Rating
Reduce
Price (Rs) 1,411
Target Price (Rs) 1,112
M/Cap (Rs bn) 191.9
Shares o/s (m) 136.0
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 31,566 36,325 42,442
EBITDA 6,366 7,305 8,460
Margin (%) 20.2 20.1 19.9
PAT 4,830 5,335 6,051
EPS (Rs) 35.5 39.2 44.5
Growth (%) 8.2 10.5 13.4
RoE (%) 104.4 103.2 103.8
PE (x) 39.7 36.0 31.7
P / BV (x) 39.2 35.2 30.9
EV / E (x) 29.4 25.5 21.9
We estimate 18% sales growth led by 11% volume growth in toothpastes. Gross
Margins are expected to improve by 70bps due to soft raw material prices. However,
EBITDA margins are expected to decline by 90bps on account of aggressive
advertising and trade-related expenses ahead of Oral-B launch by P&G. We expect
10.6% increase in PAT at Rs1.3bn. We have cut our estimates by ~9% for FY14 and
FY15 due to higher ad-spends and tax rate.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 8,881 7,561 17.5 8,315 36,325 31,566 15.1
EBITDA 1,824 1,625 12.3 1,687 7,305 6,366 14.8
Margin (%) 20.5 21.5 (94)bps 20.3 20.1 20.2 (6)bps
Reported PAT 1,298 1,174 10.6 1,232 5,335 4,830 10.5
PAT (Excl. Ex Items ) 1,298 1,174 10.6 1,232 5,335 4,830 10.5
Operating Metrics
Volume Growth % 11.0 11.0 0 bps 12.0 11.0 10.0 100 bps
Toothpaste market
Share (Vol)
55.6 54.5 110 bps 55.4 55.4 54.1 130 bps
Tax rate % 29.0 28.0 97 bps 27.3 26.5 25.1 142 bps
July 8, 2013 108