SECTOR OVERVIEW: BRITANNIA INDUSTRIES LTD.

Sales in F&B sector was predicted to grow in 2020 leading to growth in

employment. However, the pandemic has adversely affected the revenues Ticker Symbol: BRITANNIA (NSE)/ 500825 (BSE)
of the F&B sector at least in the first quarter due to lockdowns in several
Current Price: Rs 3650.70
states affecting normal life. Companies have had to ramp up capacity in the
next quarters with options for outsourcing opening up. The total organized 52 Week H/L: Rs 4015.00/2869.20
Indian Food and Beverage Industry is expected to be Rs. 4,00,000 Crores
market as of 2019 and projected to grow by 2.5x to Rs. 10,00,000 Crores by Exchanges: Nifty 500/ S&P BSE 100
2025 (CAGR of 16%) – leveraging India’s favorable demographic (1.4 Billion
strong population, rising income levels and higher urbanization). Industry: Packaged Foods

Sector: FMCG
Since end users are dispersed throughout India, this causes some
distributional inefficiency. The industry is highly fragmented, with a large Face Value: Rs 10
number of small and medium-sized businesses. After a sustained slowdown
that impacted sector operations in both FY2018 and FY2019, long-term Market Cap: Rs 87,933.79 Cr
dynamics are favorable on an expected recovery in economic growth in the
coming years. Free Float Market Cap: 43,087.56 Cr

Shareholder Pattern:
SECTOR OUTLOOK:
  2021
FMCG sector in India is expected to report a 4-5% volume growth in FY21, Promoters  50.54%
driven by rural areas that are expected to grow two percentage points
FIIs  17.96%
ahead of the urban regions that are hit harder by COVID-19 pandemic. While
COVID-19 has curtailed economic growth in the FMCG sector, experts are Others 6.40%
now optimistic that the industry will see an appreciable improvement this MFs 4.84%
year. Public  20.26%

The retail market in India is estimated to reach US$ 1.1 trillion by 2021 from
US$ 840 billion in 2017, with modern trade expected to grow at 20 25% per
annum, which is likely to boost revenue of FMCG companies. Revenue of
FMCG sector reached Rs. 3.4 lakh crore (US$ 52.75 billion) in FY18 and is
estimated to reach US$ 103.7 billion in 2021. FMCG market is expected to
grow at 9-10%. Rise in rural consumption will drive the FMCG market. It
contributes around 36% to the overall FMCG spending. In the third quarter
of FY20 in rural India, FMCG witnessed a double-digit growth recovery of
10.6% due to various government initiatives (such as packaged staples and
hygiene categories); high agricultural produce, reverse migration and a
lower unemployment rate.

BRITANNIA INDUSTRIES AT A GLANCE:

The company was established in 1892 by a group of British businessmen

with an investment of ₹295. Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was
acquired by the Gupta brothers, mainly Nalin Chandra Gupta, an attorney, and operated under the name "V.S. Brothers." In 1918,
C.H. Holmes, an English businessman based in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo)
was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in
high demand during World War II, which gave a boost to the company's sales. The company name was changed to the current
"Britannia Industries Limited" in 1979.

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 Balance Sheet 2019 2020 Profit and Loss Statement 2019 2020
Share Capital 24.03 24.05 Sales 10389 10986
Reserves 4015 4250 Expenses 8956 9432
Borrowings 0.71 479 Operating Profit 1662 1770
Other Liabilities 138 129 Other Income 190 335
Total Liabilities 1613 2978 EBITDA 1852 2106
Fixed Assets 1283 1416 Depreciation 135 151
CWIP 64 38 EBIT 1717 1954
Investments 3141 1644 Interest 1.54 65.17
Other Assets 217 141 Profit before tax 1716 1889
Total Assets 5652 7253 Net Profit 1122 1465
EPS in Rs 46.70 61.76

Trend Analysis:

Company sales is increasing Y-O-Y, but the rate is very low. While the PAT has increased by 6% to Rs 1403 from Rs 1159 in FY20, this
was attributed to increase in profit form exceptional items. Company’s expenses are steadily increasing which is creating stress on
bottom line. This increase in expenses is attributable to rising raw material and logistics costs.

Revenue
PAT Trend
Trend
14000
2000 14.00%
40.00%
12000 35.00%
12.00%
1500
10000 30.00%
10.00%
8000 25.00%
8.00%
1000 20.00%
6000 6.00%
15.00%
4000
500 4.00%
10.00%
2000 2.00%
5.00%
0 0.00%
0.00%
2018
2018 2019
2019 2020
2020 2021
2021

Net
Sales
Profit YoY%
YoY%

Outlook:

Stock is providing a good dividend yield of 3.97%. Company has a good return on equity (ROE) track record: 3 Years ROE 31.92%

Company has been maintaining a healthy dividend payout of 40.33%

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 Total Operating
Total operating Net Profit Net Profit (Loss) Total Total
Company Revenue Trend
revenue Margin (%) for the Period assets equity
(%)
Britannia Industries Ltd. 11,600 4.93 12.09 1,403 7,842 4,438
Hatsun Agro Products Ltd. 5,313 11.51 2.12 112 2,714 904
Heritage Foods Ltd. 2,726 8.4 -5.88 -160 988 462
KSE Ltd. 1,431 18.08 1.32 19 190 142
Nestle India Ltd. 13,355 7.96 15.67 2,082 7,900 2,019
Parag Milk Foods Ltd. 2,438 1.76 3.84 94 1,685 911

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