Britannia Financial statement analysis in detail

financial statement analysis

1. Britannia Profit and Loss Analysis Britannia Eat Healthy, Think Better Rakshit Stephen T 24M2389 Sachin Kuchekar 24M2394 Krish Mayur Doshi 24M2357 Muhammad Shafal Mujeeb 24M2366 Harshil Singhi 24M2345 Kanishka 24M2351

2. Agenda Company Introduction Stand Alone Statement of Profit and Loss Slowdown in sales growth Decline in other operating revenue Decline in other income Focus on expenses Change in exceptional items Financial Ratios Co mpetitor Analysis

3. Founded 1892 Headquarters Kolkata Introduction Industry FMCG Sector Bakery, Dairy, and Food Products Products Good Day, Tiger, NutriChoice, Milk Bikis, Bourbon, and Britannia Cheese Top 2 FMCG company in India by market share in the bakery segment. #1 in the biscuit market in India, with a dominant market share. 1 in 2 Indian households consume Britannia products regularly. ₹15,985 crore turnover in the FY 2022-2023. Over 60 countries worldwide with a strong presence in the Middle East, Africa, and the U.S.

4. Back to Agenda Page 31 March 2024 31 March 2023 Change in % Total revenue 16396.19 15839.01 3.5% Total expenses 13537.85 13226.68 2.4% Profit before exceptional items and tax 2858.34 2612.33 9.4% Exceptional items [Expense/(Income)] 2.9 (227.74) -101% Profit before tax (PBT) 2855.44 2840.07 0.5% Taxes 773.39 700.77 10.36% Profit after tax (PAT) 2082.05 2139.30 -2.68% PBT has not increased with the rate of increase in revenue as exceptional item head has gone down significantly. However, operating profit has gone up by 9.4%. Taxation percentage is high even though profits are almost similar to previous year. Because, previously sale of investments would have attracted capital gain tax.

5. Slowdown in sales growth As compared to sales growth in Mar 2023, the growth has slowed down. The reason for such was indicated by Mr Varun Berry (Executive Director) that Private Consumption has been on low end in past 1 year that's why the growth has been somewhat stagnant at 3.5%.

6. Britannia previously had a customer loyalty program, which contributed upto 4.78 crores in FY 22-23, but this same scheme was stopped and hence revenue from this source has completely vanished. Apart from this revenue from state industrial policy and central government schemes has dropped from 265.43 crores to 171.91 crores. Decline in other operating revenue

7. Decline in other income Decline in other income can be attributed to dividend income. No dividend was received from any of the subsidiaries of Britannia.

8. Focus on expenses Britannia has tried to focus on their expenses in the previous financial year, as observed closing inventory has been optimised, reduction of purchases of stock-in-trade.

9. Change in exceptional items There has been a change in the exceptional items as in previous year, company generated an income of 227.74 crores by selling its 49% equity stake in Britannia Dairy Private limited (BDPL). Exceptional items are one-off events that either caused a great expense or a big bout of revenue.

10. Financial Ratios Operating Margin = Operating Profit Total Revenue from operations It shows the percentage of revenue that remains after covering operating expenses. Net Profit Margin = Net Profit Total Income It reflects the overall profitability of the company after all expenses. Interest Service Coverage Ratio (ISCR) = Earning Before Interest & Tax (EBIT)​ Interest It is used to assess a company's ability to pay interest on its outstanding debt. Financial Ratio on 31st March 2024 On 31st march 2023 Operating Margin 17.30 16.31 Net Profit Margin 12.70 13.51 ISCR 19.88 17.86

11. Financial Ratios Debt to Equity Ratio Debt to Equity Ratio = Total Liabilities Shareholder’s Equity Evaluates the company’s financial leverage. Quick Ratio Quick Ratio = (Current Assets - Inventory) Current Liabilities Evaluates a company’s ability to meet short-term obligations using its most liquid assets, excluding inventory. Financial Ratio on 31st March 2024 On 31st march 2023 Debt to Equity Ratio 0.577 0.8377 Quick ratio 0.421 0.368

12. Financial Ratios Return on Equity (ROE) ROE = Net Income Shareholder's Equity Indicates how efficiently the company uses shareholders' equity to generate profits. Earnings Per Share (EPS) EPS = (Net Income - Dividends on Preferred Stock) Average Outstanding Shares Represents the profitability available to each share of common stock, useful for evaluating a company's profitability on a per-share basis. Financial Ratio on 31st March 2024 On 31st march 2023 Return on Equity 59% 67.2% Earnings Per Share 86.45 88.81

13. Competitor Analysis Reference: India: biscuit companies market share 2023 | Statista

14. The Indian biscuit market is estimated to be worth around $5–5.5 billion with Britannia and Parle dominating the market, with a combined share of 60% [1] Their dominance shows the strong brand recognition, extensive distribution networks, and a wide product range that resonates with consumers Britannia’s Consolidated Net Sales in June 2024 clocked at Rs 4,250.29 crore, up 5.97% YoY [2] [1] India: biscuit companies market share 2023 | Statista [2] Britannia Consolidated June 2024 Net Sales at Rs 4,250.29 crore, up 5.97% Y-o-Y (moneycontrol.com)