Britannia Industries approves stock split in 1:2 ratio

Britannia Industries has posted an 11.82% increase in consolidated net profit at Rs 294.27 crore for the fourth quarter ended March 31, 2019. In the corresponding quarter of the previous fiscal, the company had reported a net profit of Rs 263.16 crore.

Britannia’s total income during the period under review stood at Rs 2,860.75 crore as compared to Rs 2,581.93 crore in the year-ago quarter.

Varun Berry, Managing Director of Britannia Industries, said, "We continued the momentum in the base business through distribution expansion, heightened innovation and cost-efficiency programmes." 

Britannia has launched new categories that are in line with its goal to become a 'Total Foods Company'.

The company's net profit was at Rs 1,155.46 crore as against Rs 1,003.96 crore for the fiscal ended March 2019.

"We have witnessed a slowdown in the market place in the recent months, however, this should get neutralised with a favourable monsoon forecast and stable government post elections. In the coming quarters, the priority will be to scale up the new categories launched to ensure we stay ahead of the market and achieve profitable growth," Berry added.

ब्रिटानिया इंडस्ट्रीज (बीआईएल) बंगाल में एक नई अत्याधुनिक सुविधा में 300-350 करोड़ रुपये निवेश करने की योजना बना रहा है। कंपनी लंबे समय बाद इस राज्य में निवेश करेगी।

तारताल में स्थित प्लान्ट ब्रिटानिया इंडस्ट्रीज का सबसे पुराना प्लान्ट है। इसके अलावा, कंपनी का डंकुनी के पास एक कॉन्ट्रेक्ट पर दिया मैन्युफैक्चरिंग यूनिट है।

बीआईएल के शीर्ष अधिकारी ने कहा है, "पिछले 10 वर्षों में, कंपनी ने बिहार, ओडिशा और असम में निवेश किया है, लेकिन बंगाल में कोई नया निवेश नहीं किया था, लेकिन अब हम ऐसा कुछ करने की योजना बना रहे हैं।"

ब्रिटानिया भारत में अग्रणी खाद्य कंपनियों में से एक है। देश में कंपनी के लिए पश्चिम बंगाल तीसरा सबसे बड़ा बाजार है, क्योंकि इससे 750 करोड़ रुपये से अधिक राजस्व अर्जित होगा।

अपनी राष्ट्रीय योजना के भाग रूप, कंपनी पश्चिम बंगाल में कोल्ड चेन इंफ्रास्ट्रक्चर भी स्थापित कर सकती है। वर्तमान में, ब्रिटानिया पुणे के पास रंजनगांव में कोल्ड चेन इंफ्रास्ट्रक्चर स्थापित कर रही है।

Britannia Industries (BIL) is planning to invest Rs 300-350 crore in a new state-of-the-art facility in Bengal. The company will be investing in the state after a long time.

The plant at Taratala is the oldest plant of Britannia Industries. Besides this plant, the company has a contract manufacturing unit near Dankuni.

BIL’s top official said, “In the last 10 years, the company has invested in Bihar, Odisha and Assam but there was no fresh investment in Bengal. But now, we are planning to make some.”

Britannia is one of the leading food companies in India. West Bengal is the third largest market for the company in the country as the revenue earned from it is over Rs 750 crore.

As part of its national plan, the company may also set up cold chain infrastructure in West Bengal. Presently, Britannia is setting up cold chain infrastructure at Ranjangaon near Pune.

The country’s leading dairy brand Amul has further strengthened its market leadership over the last one year by grabbing the shares of rival brands, Britannia and Go, in general, and modern trade.

While Amul’s all-India volume share in cheese rose to 71% during the period from March 2017 to February 2018 from 64% in the previous year, Britannia’s volume share shrunk to 17% from 20% and Go’s share declined to 6% from 10%, respectively, industry sources said quoting Nielsen data.

Usually, according to industry experts, it’s difficult for a leader with a large majority share to further shore up its position. However, what helped Amul grab share from its competitors is a major expansion that trebled its production capacity to 3,000 tonnes a month.

R S Sodhi, MD of Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets its dairy products under Amul, said after the expansion, the company became aggressive on the distribution and pricing front, especially to the HoReCa (hotels, restaurants, catering) segment.

Another factor that assisted Amul, which has a strong network of 5,000 distributors, is that it did not increase prices in the last two years. The strategy paid off in boosting volumes. GCMMF plans to further expand its capacity to around 5,000 tonnes a month in the next two years.

Britannia Industries said it does not subscribe to Nielsen’s market share data for the dairy category. “As far as the cheese category for Britannia goes, we have seen healthy double-digit growth in 2017-18 with modern trade contributing marginally higher than general trade to this growth. While cheese slices (which were pioneered in India by Britannia) continue to be the largest segment for the brand, the growth has been funneled by cheese blocks, cubes, and spreads,” said Venkat Shankar, VP and head of dairy business, Britannia Industries.

Devendra Shah, chairman of Parag Milk Foods, the maker of Go cheese, also said the company’s cheese business has been growing well. “As per our internal data, our cheese business has grown more than 20% CAGR in the last one year. Along with consumer business, we are also focusing on institutional sales and direct supply to QSRs. Almost half of the consumption of cheese comes from institutions. Going by the growing demand, we are increasing our capacity from 40 metric tonnes per day to 60 metric tonnes per day,” said Shah.

In round figure, Rs 2,000-crore cheese market in India is growing at 10-12% annually. Although cheese has always been an acquired taste in India, its consumption has been growing significantly driven by pizza chains and consumers adapting to new forms of cuisines.

During the year, general trade in cheese is said to have grown ahead of modern trade. While general trade grew 20%, modern trade’s growth was around 8%. In general trade, while Britannia grew by 1%, Amul is said to have clocked a growth rate of around 30% and has a market share of 86%. Go, on the other hand, declined significantly by 65%.

More than a year after demonetisation and six months since the GST was implemented consumer demand still remains sluggish with no immediate signs of uptick and people not feeling bullish.

Rural growth, in spite of showing glimpses of optimism, is not entirely back to what it was, as people are still holding back on spending.

Britannia Managing Director Varun Berry said “Are we out of the woods? I am not sure. It will take more time for heady double-digit volume growth to come back, something we haven’t seen in the last five years. From the lowest that we have seen post-demonetisation and GST, we are on an uptrend as a category (biscuits), but then there are these roadblocks, all for the right reasons though, which act as speed breakers and put a cap on the optimism. Rural demand has not fully recovered, in spite of the monsoons this year. He attributes it to people not feeling rich”.

The maker of Bourbon and Good Day biscuits reported a 5% rise in revenue for the six months ended September 30, something it says it has been able to by increasing its distribution footprint steadily over the last few years and not because of the health of the industry. Biscuits contribute about 70% to the company’s topline, followed by cake & rusks (13%) and bread (5%).

From 550,000 direct retail outlets five years ago, the Bengaluru-based company now has access to 17 lakh direct outlets. This has helped it expand in rural areas, with particular focus in Rajasthan, Madhya Pradesh, Uttar Pradesh and Gujarat, where it lags behind its rivals.

To strengthen its position as a leading food company in the country, FMCG major, Britannia is scouting for profitable growth opportunities, especially in the bakery segment.

Britannia, in its Annual Report for 2016-17, said, "Going forward, your company's major focus areas would be entry into adjacent food categories... Your company has been actively working on realising untapped opportunities in the bakery business as well as in the adjacent macro snacking space."

It further said, "Your company shall continue to scout for many such profitable growth opportunities to ensure that it stays ahead of the market while transforming itself into a total foods company."

Last year, Britannia, whose main business segments are bakery and dairy, had entered into a joint venture (JV) agreement with Greece's Chipita S. A for manufacture and sale of ready-to-eat filled croissants.

Currently, the work is underway to establish operations of the JV.

The company also expects to use its newly-launched research & development (R&D) centre at Bidadi near Bengaluru for launch of new products.

It added, "R&D centre is now fully operational with enhanced capabilities for the core as well as future adjacent product categories which will help in innovating faster with superior product experience delivery."

In order to increase its international business, the company is also evaluating entry through local manufacturing, wherever feasible, in high potential markets which are currently not accessible through exports routes due to high trade barriers.

Britannia Industries has reported a 66.86 per cent jump in consolidated net profit at Rs 189.66 crore for the first quarter ended June 30, 2015, helped by operational efficiencies.

The company had posted a net profit of Rs 113.66 crore in the same period of previous fiscal, Britannia Industries said in a filing to the BSE.

The net sales of the company rose to Rs 2,002.51 crore during the quarter, up 12.96 per cent from Rs 1,772.63 crore in the same period of previous fiscal.

"Our results are a reflection of our focus on driving consumer off-take and operational efficiencies to generate sustainable and profitable growth, despite the slowdown witnessed in the FMCG sector", said  Varun Berry, MD, Britannia Industries.

"We remain committed to tap new sources of growth and focus on commercialising consumption opportunities across our product portfolio", he added.

Britannia's overall expenses in the quarter stood at Rs 1,757.52 crore, up 6.56 per cent from Rs 1,649.18 crore in the same quarter a year ago.

Shares of Britannia Industries were trading at Rs 3,173.65 apiece on BSE, up 1.31 per cent from their previous close.