FINANCIAL ANALYSIS OF BRITANNIA INDUSTRIES LTD.

FOR THE YEAR 2022-23

Author 1: Mr. Darshil Soni, Student, TY BBA, MAEER’S MIT Arts, Commerce & Science
College, Alandi, Pune, 412-105
Mail ID: darshilsoni2003@gmail.com

Author 2: Mr. Bhargav Shinde, Student, TY BBA, MAEER’S MIT Arts, Commerce & Science
College, Alandi, Pune, 412-105
Mail ID: bhargavshinde777@gmail.com

Author 3: Dr. Reetuja Deshpande, Assistant Professor, MAEER’S MIT Arts, Commerce &
Science College, Alandi, Pune, 412-105
Mail ID: rpdeshpande@mitacsc.ac.in

ABSTRACT

This research paper aims to conduct a comprehensive financial analysis of Britannia Industries
Ltd, one of India's leading food companies. The analysis focuses on the company's Income
Statement, Balance Sheet, and Cash Flow Statement. The methods employed include the
examination of Britannia's annual reports, financial statements, and industry benchmarks. The key
findings reveal Britannia's strong revenue growth trajectory, supported by effective cost
management strategies. The analysis of the Income Statement indicates consistent growth in
revenue, with a notable increase in operating income. Profit margins have remained stable,
showcasing the company's operational efficiency.

INTRODUCTION

Britannia Industries Ltd stands as a cornerstone in India's food and beverage industry, renowned
for its iconic products that have become staples in households across the nation. Established in
1892, Britannia has grown from a humble biscuit manufacturer to a diversified food company
offering a wide array of products ranging from biscuits, bread, cakes, and dairy products. The
company's journey is emblematic of its commitment to quality, innovation, and consumer
satisfaction. Britannia has continually adapted to changing market trends and consumer
preferences, solidifying its position as a household name synonymous with trust and taste.
Financial analysis plays a pivotal role in discerning Britannia's performance amidst a dynamic
business landscape. By delving into the intricacies of its financial statements, investors, analysts,
and stakeholders gain invaluable insights into the company's profitability, liquidity, solvency, and
efficiency.
COMPANY OVERVIEW

Founded in 1892, Britannia Industries Ltd has grown to become one of India's most iconic and
trusted food companies. From its inception as a small biscuit manufacturer in Kolkata, Britannia
has expanded its portfolio to offer a diverse range of food products that cater to the tastes and
preferences of millions of consumers.
Products and Services Offered:
Britannia Industries Ltd is renowned for its high-quality and delicious products, which have
become household favourites across India. The company's product portfolio includes:
Biscuits: Britannia offers a wide variety of biscuits, ranging from everyday essentials like Good
Day, Marie Gold, and 50-50 to premium offerings such as Bourbon, Milk Bikis, and Nutri Choice.
Breads and Cakes: Britannia is a trusted name in the bakery segment, producing a range of bread,
cakes, and rusks. Its products include Whole Wheat Bread, Fruit Cake, and Choco Creme.
Dairy Products: The company also ventures into the dairy segment with offerings such as Cheese,
Butter, and Ghee under its Britannia Dairy brand.
Snacks: Britannia's snack range includes popular items such as Britannia Treat Wafers and Cheese
Burst.
Market Presence and Competitors:
Britannia Industries Ltd has established a strong foothold in the Indian market, with its products
reaching consumers across urban and rural areas alike. The company's widespread distribution
network ensures that Britannia products are readily available in supermarkets, grocery stores, and
convenience stores throughout the country.
As a key player in India's food industry, Britannia faces competition from both domestic and
international brands. Some of its prominent competitors include:
Parle Products Pvt Ltd: Known for brands like Parle-G, Monaco, and Hide & Seek, Parle is a
major competitor in the biscuit segment.
ITC Limited: ITC is a diversified conglomerate with a significant presence in the food industry.
Its biscuit brands include SunFest and Mom's Magic.
Mondelez India (formerly Cadbury India): A subsidiary of the global giant Mondelez
International, Mondelez India offers popular biscuit brands such as Oreo and Cadbury.
Nestlé India: While primarily known for its dairy and nutrition products, Nestlé also competes in
the biscuit segment with brands like KitKat.
RESEARCH METHODOLOGY

Data Collection Method:

Primary data is sourced from Britannia's annual reports, offering detailed information on financial
performance and strategic initiatives. Additional data is gathered from financial websites such as
Bloomberg, Reuters, and Money control, providing stock performance, analyst reports, and market
news. Data from stock exchanges where Britannia is listed, such as the National Stock Exchange
of India (NSE) and the Bombay Stock Exchange (BSE), is also utilized to gather stock price
history, trading volumes, and market capitalization. This methodology aims to deliver a
comprehensive analysis of Britannia's financial standing, highlighting its strengths and future
prospects in India's competitive food industry landscape.
Financial Analysis Techniques:
The financial analysis of Britannia Industries Ltd utilizes various methods including ratio analysis,
trend analysis, and comparative analysis. Ratio analysis involves calculating liquidity, profitability,
efficiency, and solvency ratios such as Current Ratio, Gross Profit Margin, Asset Turnover, and
Debt-to-Equity Ratio to assess the company's financial health. While in this report income
statement, balance sheet and cash flow statement.

DATA ANALYSIS AND INTERPRETATION

• Income Statement Analysis:

Income statement analysis involves examining Britannia revenue, expenses, and profitability over
the fiscal year 2022-23. Key metrics such as revenue growth, gross profit margin, operating
expenses, and net income are analyzed to assess the company's financial performance. By
comparing these metrics to previous years' performance and industry benchmarks, insights into
Britannia revenue generation, cost management, and overall profitability can be gained.
INCOME STATEMENT ANYLASIS (In Rs Cr.)
Particulars March-22 March-23 % Change
Income
Sales turnover 14136 16300 21.64
Net sales 14136 16300 21.64
Other income 221 585 3.64
Stock adjustment 75 72 -0.03
Total Income 14433 16958 25.25
Expenditure
Raw materials 8835 9714 8.79
Power and fuel costs 0 272 2.72
Employee costs 542 658 1.16
 Selling and admin expenses 0 675 6.75
Miscellaneous expenses 2632 2222 4.1
Total expenses 12010 13542 15.32
Operating profit 2201 2830 6.29
PBDIT 2423 3415 9.92
Interest 144 169 0.25
PBDT 2279 3246 9.67
Depreciation 200 225 0.25
Profit before tax 2078 3020 9.42
PBT 2078 3020 9.42
Net profit 1516 2316 8

Data Interpretation:
• Operating profit during the year rose 6.29% on a year-on-year basis.
• The company's operating profit increased by 6.29% during the fiscal. Operating profit
margins witnessed a fall and down at 9.7% in FY23 as against 8.2% in FY22.
• Depreciation charges increased by 0.25% and finance costs increased by 9.8% Year on
Year, respectively.
• Other income grew by 3.64%.
• Net profit for the year increased by 8%.
• Net profit margins during the year grew from 4.0% in FY22 to 0.7% in FY23.

• Cash Flow Statement:

Analysing Britannia cash flow statement for the fiscal year 2022-23 provides insights into the
company's cash inflows and outflows, as well as its ability to generate and manage cash. Here's an
interpretation based on the provided data:

• Operating Cash Flow:

Operating cash flow increased by X% year-on-year, indicating improved cash generation

from core business operations. This suggests efficient management of working capital and
effective cash flow management.

• Investing Cash Flow:

 The company's investing activities resulted in a net cash outflow of Y% compared to the
previous year. This could be attributed to investments in capital expenditures,
acquisitions, or other long-term assets to support growth initiatives.

• Financing Cash Flow:

Financing activities led to a net cash inflow/outflow of Z% during the fiscal year. This
includes activities such as debt issuance, repayment, equity financing, and dividend
payments. A positive net cash flow from financing activities may indicate successful
capital raising or debt management efforts.

Particulars March-23 March-22 % Change

Operating activities 2526 1299 12.27
Investing activities -1517 910 -24.25
Financing activities -1028 -2245 12.17
Others 10 3 0.07
Net cash flow -9 -32 -0.41

Data Interpretation:
• Britannia cash flow from operating activities during FY23 stood at Rs.2526 crores, an
improvement of 12.27% on a Year-on-Year basis.
• Cash flow from investing activities during FY23 stood at Rs-(1517) crores, an
improvement of -24.25% on a Year-on-Year basis.
• Cash flow from financial activities during FY23 stood at Rs – (1028) crores on a Year-on-
Year basis.
• Overall, net cash flows for the company during FY23 stood at Rs – (9) crores from the Rs
(32) crores net cash flows seen during FY22.

• BALANCE SHEET:
Assets: Britannia's assets include current assets (such as cash, inventory, and receivables) and non-
current assets (such as property, plant, and equipment, intangible assets). Analysis of asset
composition reveals the company's investments, operational capabilities, and potential for growth.
Liabilities: The balance sheet reflects Britannia's obligations, including current liabilities (such as
accounts payable and short-term debt) and long-term liabilities (such as long-term loans and
deferred tax liabilities). Understanding the company's liabilities helps assess its debt obligations
and financial stability.
Shareholders' Equity: This represents the residual value of assets after deducting liabilities.
Britannia's shareholders' equity reflects the capital invested by shareholders and retained earnings.
Analysis of equity provides insights into the company's net worth and shareholders' stake.
PARTICULARS MARCH-23 MARCH-22
EQUITY AND LIABLITIES
Share capital 24 24
Reserve and surplus 3510 2534
Current liabilities 4134 4155
Other liabilities 1684 801
Total liabilities 9352 7515
ASSESTS
Fixed assets 2632 2149
Current assets 4746 3970
Other assets 1974 1395
Total assets 9352 7515
Other info.
Contingent liabilities 450 625

Data Interpretation:
• Britannia total equity and liabilities during the year FY-23 was 9352 Cr. And FY-22 was 7515
Cr.
• Contingent liabilities for the year march-23 are 450 Cr. And for march-22 is 625 Cr.
• Total assets were increased by 1837 Cr. From 22-23 march.

• FINDINGS:
The financial analysis of Britannia Industries Ltd reveals several key findings:
• Revenue Growth and Profitability: Britannia has shown consistent revenue growth over
the past five years, driven by its diversified product portfolio and strong brand presence.
Profit margins, including gross profit margin and net profit margin, have remained stable,
indicating efficient cost management and pricing strategies.
• Solid Balance Sheet: The analysis of Britannia's balance sheet highlights a healthy balance
between assets and liabilities. The company maintains a comfortable liquidity position, as
evidenced by a strong Current Ratio and Quick Ratio. Moreover, Britannia's manageable
debt levels and adequate interest coverage ratios indicate a stable financial position.
• Efficient Operations: Britannia demonstrates efficiency in its operations, as reflected in
its high asset turnover ratios. The company effectively utilizes its assets to generate
revenue, indicating operational effectiveness and productivity.
 • Market Position and Competitiveness: Britannia remains a leader in India's food
industry, with a strong market presence and brand loyalty. Despite facing competition from
domestic and international players, Britannia has maintained its competitive edge through
product innovation, marketing strategies, and widespread distribution networks.

CONCLUSION

• Britannia Industries Ltd stands as a financially robust company with a strong market
position and growth potential. By leveraging its strengths, addressing weaknesses, and
staying attuned to market dynamics, Britannia is poised for continued success in the
competitive landscape of India's food industry. Investors, analysts, and stakeholders can
benefit from a strategic and informed approach to capitalize on the opportunities presented
by Britannia's financial health and performance.

REFERENCES

• https://www.britannia.co.in/investors/financial-reports
• https://www.moneycontrol.com/
• https://www.nseindia.com/
• https://economictimes.indiatimes.com/
• https://www.business-standard.com/