Britannia – Good Day? Good Quarter! Good Year!

Britannia Industries Limited (BIL) is an Indian company specialised in the food industry. The company is a part of the Wadia Group which is headed by Nusli Wadia. The company was founded in 1892 by a group of British businessmen with an investment of ₹295. The company is headquartered in Kolkata. It is one of India’s oldest companies and is renowned for its biscuit products.

Britannia Industries is one of India’s leading food companies with a 100-year legacy having annual revenues leading ahead of Rs 9000 crore. Britannia is among the most trusted food brands, and manufactures India’s favourite brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold which are common household names in India. Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk and Yoghurt which are sold throughout India and internationally.

Quarterly Growth Walkthrough

Britannia has registered a vigorous growth of 46% in the consolidated net profit to ₹555.59 crore for the fourth quarter Q4FY23. This is in comparison to the net profit of ₹381.15 crore in Q4FY22.     

The consolidated revenue from operation has grown by 13.18% to ₹4,079.55 crore in Q4FY23 from ₹3,604.28 crore in Q4FY22.

Britannia company’s EBITDA (Earnings Before Interest and Tax, Depreciation and Amortization) was computed at ₹800 crore. However, the margins were up by 20%. The company’s volume growth was calculated at 1%.

The company announced commercialisation of two Biscuit greenfield units in this quarter – in Uttar Pradesh & Tamil Nadu and brownfield expansion in Orissa.

Britannia reported a 15% enhancement in consolidated sales to ₹15,985 crore, while the operating profit grown by 27.5% to ₹2,652 Crores. The net profit (with the inclusion of exceptional items) has grown by 46% to Rs. 3,033 Crores.

The company has announced that the net profit for the year includes an exceptional gain (net of tax) for an amount of ₹359 crores. This is on behalf of a joint venture agreement with Bel SA for the cheese business and the subsequent sale of 49% equity stake in its subsidiary and fair valuation of the residual stake of 51%.

Word from the Board

Varun Berry, Vice Chairman & Managing Director, Britannia said in a statement that “We delivered a robust growth of 11% in this quarter on the back of significant distribution gains, which reflects our execution strength across businesses & channels. We continued to accelerate our rural journey with focus on enhancing reach, partnering with 28,000 rural distributors, and sustaining our diligent market practices.”

Berry continued with “We also commercialised three new lines of Rusk this quarter. This is in line with our strategy to make in-house, our exclusive range of products, and further enhance productivity. We efficiently scaled-up the capacity of our drinks and other dairy lines to better leverage seasonal opportunities & enhance supplies to Bakery division for captive consumption”.

Technical Analysis

Britannia Weekly Candlestick Chart on Sharekhan’s TradeTiger

Britannia stock price has hit the 161.8% retracement level again and we can observe a double top candlestick pattern. The stock might be able to have a breakout and the price can reach the 261.8% retracement level soon. The stock is highly overbought and the weekly MFI is at 78 points which confirms the stock price is very expensive.

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