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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) 2QFY00 2QFY01 Change 1HFY00 1HFY01 Change
Sales 3,054 3,519 15.2% 5,920 6,839 15.5%
Other Income 26 36 38.5% 48 49 2.1%
Expenditure 2,851 3,300 15.7% 5,580 6,365 14.1%
Operating Profit (EBDIT) 203 219 7.9% 340 474 39.4%
Operating Profit Margin (%) 6.6% 6.2%   5.7% 6.9%  
Interest 21 22 4.8% 40 41 2.5%
Depreciation 40 46 15.0% 81 92 13.6%
Profit before Tax 192 249 29.7% 353 460 30.3%
Other adjustments -3 68 - -5 61 -
Tax 62 104 67.7% 115 173 50.4%
Profit after Tax/(Loss) 127 213 67.7% 233 348 49.4%
Net profit margin (%) 4.2% 6.1%   3.9% 5.1%  
No. of Shares (eoy) (m) 18.6 27.9   18.6 27.9  
Diluted no. of shares 27.9 27.9   27.9 27.9  
Earnings per share (annualised)*       17.1 20.6  
*(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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