Britannia - Result Analysis Q1 FY20-21

Britannia - Result Analysis Q1 FY20-21

CMP:  3,784 (As on 17-07-2020)

 

Total revenue from operations 3,421 Cr 

2,700 Cr (26.71%)  YoY | 2,868 Cr (19.27%)  QoQ 

 

Year ending revenue: 11,600 Cr Vs. 11,055 Cr (4.94%)

Net Profit of 542.7 Cr 

248.7 Cr (118.52%) YoY 372.3 Cr (45.69%) QoQ 

 

Year ending Net profit: 1,394 Cr Vs. 1,155 Cr (20.69%)

EPS (in Rs.) 22.69

10.44 YoY |15.58 QoQ 

 

Year ending EPS: 58.34 Vs. 48.24

View: Result is overall good. YoY revenue and QoQ revenue increased and profit significantly increased in both the quarter due to improved material consumption ratio.     

Business Updates & Highlights:

Q4FY21 EBITDA was around INR 716.8 Cr Vs. 394.6 Cr in Q1FY21 Vs. 454.1 Cr in QoQ therefore up by 81.7% in YoY and up by 57.7% in QoQ. EBITDA margin is around 21.1% Vs. 14.7% in YoY Vs. 16.1% in QoQ. 

Financial

ROE and ROCE is around INR 33% and 37% respectively and book value per share is around INR 184 and share is currently trading at 20.6x of its book value. Company is currently trading at annualized PE of 55 which is fair as per Industry benchmark. Promoter holding is around 50.6% in the company which is strong and stable.  FIIs, insurance cos and mutual fund hold around 14.7%, 7.7% and 5% in the company.  Company is very strong operating cash flow and further liquidity position is also very sound in the company.

Position: Share support price is INR 3,560. Long term investor should continue with the company and any correction give good opportunity to add. 

Share View: Share price high 3,890 (52 week) and now 3,780. Britannia Industries is one of India’s leading food companies with a 100 year legacy and annual revenues in excess of Rs. 9000 Cr. Britannia is among the most trusted food brands, and manufactures India’s favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold which are household names in India. Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk and Yoghurt. Britannia is a brand which many generations of Indians have grown up with and brands are cherished and loved in India and the world over.

Opportunities: On the cost front, moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest. Given the dynamic nature of the pandemic & associated uncertainty, company were quick to resort to cost efficiencies through extraction of supply chain efficiencies, reduction in wastages and fixed costs leverage. Despite Covid – 19 outbreak company were successfully achieved and improve the shape of business and record a massive 670 bps increase in operating profit during the quarter. During this period, company launched ‘Winkin Cow Lassi’ & a Rs. 5 Layer Cake pack to expand the reach. All the adjacent businesses too delivered a healthy profitable growth. The company is now studying the impact of the virus on short-term and long-term changes in consumer preferences and distribution models

Risk: Valuation is bit expensive and share reached at all time high. Q2 and FY21 Covid -19 outbreak impact can’t be discounted. As compare to FY20 Vs. FY19 topline is slightly up and poor growth. 

Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.

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Sources: Various publications

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