Brittania Company analysis

Industry Overview :  India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for ready made food products at a tenable cost. Biscuits were assumed as sick-man’s diet. Today Indian  Biscuits Industry is the largest among all the food industries and has a turn over of around Rs.3000 crores. India is known to be the second largest manufacturer of biscuits, the first being USA. It is classified under two sectors: organized and unorganized. Bread and biscuits are the major part of the bakery industry and covers around 80 percent of the total bakery products in India.

Biscuits stands at a higher value and production level than bread. This belongs to the unorganized sector of the bakery Industry and covers over 70% of the total production. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tonnes in 1990. Biscuits contributes to over 33 percent of the total production of bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units.

Now, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. Even, the rural sector consumes around 55 percent of the biscuits in the bakery products.

Indian biscuit industry has occupied around 55-60 percent of the entire bakery production. Few years back, large scale bakery manufacturers like cadbury, nestle, and brooke bond tried to trade in the biscuit industry but couldn’t hit the market because of the local companies that produced only biscuits.

Share of premium biscuits is likely to increase by FY 2019 as manufacturers are now aggressively entering the premium biscuit and cookie segment on account of higher margins prevalent in the segmentIncrease in disposable income, changing lifestyles, growth in organized retail and increasing consumption of processed and packaged food are the main drivers of the industry

Today Britannia, ITC, Parle are among biggest players in the Sector.

Company overview : Britannia Industries, Part of Wadia Group is a manufacturer of Biscuits, Cake and Rusk. The company is major player in the Indian Foods market with leadership position in Bakery category.

Products : Bisuits

  • Good Day
  • Crackers
  • NutriChoice
  • Marie Gold
  • Tiger
  • Milk Bikis
  • Jim Jam + Treat
  • Bourbon
  • Little Hearts
  • Pure Magic
  • Nice Time.

Other

  • Whole Wheat Breads
  • White Sandwich Breads
  • Bread Assortment
  • Cheese
  • Fresh Dairy and Accompaniments
  • Bar Cakes
  • Veg Cakes
  • Chunk Cake
  • Nut & Raisin Romance Cake and Mufills
  • Premium Bake Rusk

The Companys plants are situated in Kolkata, Delhi, Chennai, Mumbai and Uttarakhand.

SHAREHOLDING


Financials and Ratios :  

 2010-112011-122012-132013-142014-152015-16
Revenue4223.524974.195615.496307.397175.997947.90
Net Profit145.29186.74233.87369.83622.41749.09
Net Profit Margin3.443.774.165.868.679.45
EPS12.1615.6219.5530.8751.8962.43
Dividend per Share6.508.58.5121620
Dividend Payout53.4454.3743.4738.9130.8332.03
ROE32.1935.9036.7443.3350.3744.05
ROCE14.1526.9428.6841.7449.4143.43
ROA9.8011.1613.8920.0525.2824.42
Asset Turnover284.89297.43333.6 5341.96291.47259.12
Debt to Equity0.950.050.3000
Book Value37.7843.5453.2371.15103.01141.68

Future Prospects : As it is expected that disposable income will increase, the demand for biscuits will also increase. The hurdle for the sector is awareness about health and fitness. Britannia also manufacturing products for the segment with different name and need. As the brand name is big and the company also holds big market share and distribution network, hardly there is any issue for the company.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter