BRITANNIA 2019-20 Annual Report Analysis

Tue, 31 Mar

BRITANNIA has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

BRITANNIA Income Statement Analysis

• Operating income during the year rose 4.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 5.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.7% in FY20 as against 15.7% in FY19.
• Depreciation charges increased by 14.2% and finance costs increased by 746.0% YoY, respectively.
• Other income grew by 35.3% YoY.
• Net profit for the year grew by 20.5% YoY.
• Net profit margins during the year grew from 10.5% in FY19 to 12.0% in FY20.

BRITANNIA Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	110,547	115,996	4.9%
Other income	Rs m	2,065	2,794	35.3%
Total Revenues	Rs m	112,611	118,790	5.5%
Gross profit	Rs m	17,334	18,262	5.4%
Depreciation	Rs m	1,619	1,848	14.2%
Interest	Rs m	91	769	746.0%
Profit before tax	Rs m	17,689	18,439	4.2%
Tax	Rs m	6,125	4,507	-26.4%
Profit after tax	Rs m	11,564	13,932	20.5%
Gross profit margin	%	15.7	15.7
Effective tax rate	%	34.6	24.4
Net profit margin	%	10.5	12.0

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BRITANNIA Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 26 billion as compared to Rs 19 billion in FY19, thereby witnessing an increase of 39.3%.
• Long-term debt stood at Rs 8 billion as compared to Rs 619 million during FY19, a growth of 1137.2%.
• Current assets rose 4% and stood at Rs 37 billion, while fixed assets rose 54% and stood at Rs 41 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 78 billion as against Rs 62 billion during FY19, thereby witnessing a growth of 26%.

BRITANNIA Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	42,333	43,684	3.2
Current Liabilities	Rs m	18,514	25,785	39.3
Long-term Debt	Rs m	619	7,661	1,137.2
Total Liabilities	Rs m	62,281	78,227	25.6
Current assets	Rs m	35,263	36,750	4.2
Fixed Assets	Rs m	27,017	41,477	53.5
Total Assets	Rs m	62,281	78,227	25.6

BRITANNIA Cash Flow Statement Analysis

• BRITANNIA's cash flow from operating activities (CFO) during FY20 stood at Rs 15 billion, an improvement of 28.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -15 billion, an improvement of 79.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 579 million, an improvement of 116% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 165 million from the Rs -491 million net cash flows seen during FY19.

BRITANNIA Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	11,558	14,845	28.4%
Cash Flow from Investing Activities	Rs m	-8,555	-15,316	-
Cash Flow from Financing Activities	Rs m	-3,527	579	-
Net Cash Flow	Rs m	-491	165	-

Current Valuations for BRITANNIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.9, an improvement from the EPS of Rs 48.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,689.7, stands at 46.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 14.8 times, while the price to sales ratio stands at 5.6 times.
• The company's price to cash flow (P/CF) ratio stood at 42.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	460.0	482.4
TTM Earnings per share	Rs	48.1	57.9
Diluted earnings per share	Rs	48.0	57.8
Price to Cash Flow	x	56.3	42.2
TTM P/E ratio	x	64.2	46.5
Price / Book Value ratio	x	27.5	15.3
Market Cap	Rs m	1,165,916	666,626
Dividends per share (Unadj.)	Rs	15.0	35.0

Ratio Analysis for BRITANNIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY20, from 1.9x during FY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 25.0x during FY20, from 195.6x during FY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 31.9% during FY20, from 27.3% during FY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 37.4% during FY20, from 41.4% during FY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 18.8% during FY20, from 18.7% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.9	1.4
Debtors’ Days	Days	1	1
Interest coverage	x	195.6	25.0
Debt to equity ratio	x	0.0	0.2
Return on assets	%	18.7	18.8
Return on equity	%	27.3	31.9
Return on capital employed	%	41.4	37.4

To see how BRITANNIA has performed over the last 5 years, please visit here.

BRITANNIA Share Price Performance

Over the last one year, BRITANNIA share price has moved down from Rs 3,082.0 to Rs 2,689.7, registering a loss of Rs 392.3 or around 12.7%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for BRITANNIA and quarterly results for BRITANNIA)

Read: Latest Annual Report Analysis of BRITANNIA