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Britannia: Healthy performance

Nov 1, 2000

Bakery products major, Britannia Limited, has recorded a 15% growth in its turnover in 2QFY01. A 39% surge in other income coupled with a huge extraordinary write back of Rs 68 m has helped Britannia post a 67% jump in bottomline.

(Rs m)2QFY002QFY01Change1HFY001HFY01Change
Sales3,0543,51915.2%5,9206,83915.5%
Other Income263638.5%48492.1%
Expenditure2,8513,30015.7%5,5806,36514.1%
Operating Profit (EBDIT)2032197.9%34047439.4%
Operating Profit Margin (%)6.6%6.2%5.7%6.9%
Interest 21224.8%40412.5%
Depreciation404615.0%819213.6%
Profit before Tax19224929.7%35346030.3%
Other adjustments-368--561-
Tax6210467.7%11517350.4%
Profit after Tax/(Loss)12721367.7%23334849.4%
Net profit margin (%)4.2%6.1%3.9%5.1%
No. of Shares (eoy) (m)18.627.918.627.9
Diluted no. of shares27.927.927.927.9
Earnings per share (annualised)*17.120.6
*(excludes other adjustments)
Current P/e ratio 37.7

In real terms, if we exclude the extraordinary write back, then Britannia's bottomline actually shows a growth of 12% to Rs 145 m. As a result, the company's net margins actually decline from 4.2% in 2QFY00 to 4.1% in 2QFY01. This decline is despite a 39% jump in its other income.

A 16% surge in its expenditure seems to have contributed to the decline in its margins. At the current price of Rs 775, the stock trades at a P/e multiple of 37.7 times its annualised FY01 earnings. The company's market capitalisation to sales ratio is 1.5 times. This is amongst the lowest in the FMCG industry.

For FY01, we had projected a 16% growth in turnover and a 44% growth in the bottomline. Britannia seems on course as per these projections.

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