Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Britannia: Other income fillip… - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 29, 2003

    Britannia: Other income fillip…

    Britannia Industries has reported just over 3% growth in 1QFY04 topline. The company has however finished the June quarter with a significant 53% net profit growth.

    (Rs m) 1QFY03 1QFY03 Change
    Net Sales 3,266 3,369 3.2%
    Other Income 10 86 760.0%
    Expenditure 2,890 2,934 1.5%
    Operating Profit (EBDIT) 376 435 15.7%
    Operating Profit Margin (%) 11.5% 12.9%  
    Interest 28 24 -14.3%
    Depreciation 63 58 -7.9%
    Profit before Tax 295 439 48.8%
    Tax 91 148 62.6%
    Extraordinary items (VRS) -17 -5 -70.6%
    Profit after Tax 187 286 52.9%
    Net profit margin (%) 5.7% 8.5%  
    Effective tax rate (%) 30.8% 33.7%  
    No. of Shares (eoy) (m) 26.9 25.1  
    Diluted earnings per share* 29.8 45.6  
    P/E ratio   12.1  
    (* annualised)      

    The significant rise in bottomline is largely led by a huge 760% growth in other income. This significant rise in other income has arisen out of profit on sale of investment as well as an excise duty refund. The company has not given out the break-up of this extraordinary income. If we exclude the other income component from the numbers, then profit before tax is up nearly 24% YoY

    Cost break-up
    (Rs m) 1QFY03 1QFY04 Change
    Material cost 1,044 1,496 43.3%
    Staff cost 396 210 -47.0%
    Purchase of finished goods 1,251 1,000 -20.1%
    Other expenditure 199 228 14.6%
    Total expenditure 2,890 2,934 1.5%

    An expansion in the operating margins has also aided the strength in performance. The company's staff cost has gone down by 47% during the quarter. The company's move to hive off its dairy business in 2002, as well as a VRS scheme seem to be the key reason for this fall in staff cost. Britannia's purchase of finished goods is also down 20% in the June quarter. However, the company's raw material costs are up a significant 43%, thus negating the gains from pruning of purchase of finished goods. Net, net, operating expenses grew by only 1.5%, vis-ŕ-vis sales growth of over 3% during the quarter.

    The primary business of the company is now bakery, which consists of biscuits, bread and cakes. At the current price of Rs 553 the stock trades at 12.1x annualised 1QFY04 earnings, market cap to sales of 1x. However, the valuations are skewed owing to the other income fillip. Moreover, the recent controversy on the exit of the company's ex-MD (Mr. Sunil Alagh), has also raised promoter related concerns.



    Equitymaster requests your view! Post a comment on "Britannia: Other income fillip…". Click here!


    More Views on News

    GSK Consumer: On the Recovery Path (Quarterly Results Update - Detailed)

    Jun 20, 2017

    While GSK consumer reported muted revenue growth, volumes are seen to be recovering.

    Britannia: Margin Expansion Trend Continues (Quarterly Results Update - Detailed)

    Mar 11, 2016

    Britannia declared results for the quarter ended December 2015. The company's revenues were up by 10% YoY, while profits came in higher by 51% YoY.

    Britannia: Strong momentum continues... (Quarterly Results Update - Detailed)

    Nov 25, 2015

    Britannia declared results for the quarter ended September 2015 recently. While revenues were up by 12% YoY for the quarter, profits came in lower by 20% YoY.

    A Little Gem in the FMCG Sector (Sector Info)

    Jul 18, 2016

    Will investing in Bajaj Corp yield high returns on account of a rural revival in sight?

    Parag Milk Foods Limited (IPO)

    May 4, 2016

    Should you subscribe to Parag Milk Foods' initial public offering?

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)


    • Track your investment in BRITANNIA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks


    Compare Company With Charts