Mehabe score: 4 G Factor: 5 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 6.
Description
Britannia Industries is one of Indias 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 Indias favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis and Marie Gold which are household names in India. Britannias product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk and Yoghurt.
Main Points
Part of Wadia Group#
Britannia Industries belongs to the Wadia Group, a reputed Indian Business house who has presence in wide range of business segments like Airlines (Go Air), Realty ( Bombay Realty), Textiles ( Bombay Dyeing) and Plantations and other business (Bombay Burmah trading Corporation which is also the Ultimate holding company of Britannia Industries)Site:BRITANNIAMain Symbol:BRITANNIA
Stock trades at 3423.0, below its 50dma 3513.59 and below its 200dma 3521.88. The stock remains bearish on technicals
The 52 week high is at 4005.00 and the 52week low is at 3317.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is providing a good dividend yield of 4.60%.
– has a good return on equity (ROE) track record: 3 Years ROE 36.48%
– has been maintaining a healthy dividend payout of 98.22%
Weakness
– Stock is trading at 23.24 times its book value
-The company has delivered a poor sales growth of 9.36% over past five years.
Competition
– The industry trades at a mean P/E of 53.5x. Nestle India trades at the industry’s max P/E of 77.19x. BRITANNIA trades at a P/E of 44.2x
– Industry’s mean G-Factor is 4.5 while the mean Piotski score is 9.0. BRITANNIA has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is -2.9%. The max 1- month return was given by Nestle India: a return of 0.39 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3403.0 cr compared to Rs 3421.0 cr for period ended Jun 2020, a fall of 0.5%
Operating Profits reported at Rs 554.0 cr for period ended Jun 2021 vis-vis 717.0 for period ended Jun 2020 .
Operating Margins contracted -467.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 16.17 compared to Rs 15.13 for previous quarter ended Mar 2021 and Rs 22.69 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 13119.0 cr for period ended TTM vis-vis sales of Rs 13136.0 cr for the period ended Mar 2021, a fall of 0.1%. The 3 year sales cagr stood at 5.9%.
Operating margins shrank to 18.0% for period ended TTM vis-vis 19.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 1708.0 cr for period ended TTM vis-vis sales of Rs 1864.0 cr for the period ended Mar 2021, falling 9.1%.
Company recorded a healthy Net Profit CAGR of 13.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1851.0 cr for period ended Mar 2021 vis-vis Rs 1485.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 47.0% compared to 36.0% over the last 3 Years. – The stock has given a return of -10% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 13% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 33% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 18.4% vis-vis 17.96% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 19.87% vis-vis 20.26% for Mar 2021
Conclusion
– Stock is providing a good dividend yield of 4.60%.
– has a good return on equity (ROE) track record: 3 Years ROE 36.48%
– has been maintaining a healthy dividend payout of 98.22% – Stock is trading at 23.24 times its book value
-The company has delivered a poor sales growth of 9.36% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 3513.59 and is trading at 3423.0. Shows a near term lack of buying interest.
