Britania Supply Chain

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GICS Industry : Food Products l Sub Industry : Packaged Foods & Meats l Website : www.britannia.co.in

Britannia Industries Ltd
Key Stock Indicators
NSE Ticker : Bloomberg Ticker : Face value / Share: Div. Yield (%): BRITANNIA BRIT:IN 10.0 6.1 CMP (as on 04 Jan 2011—Rs/share): 52-week range up to 04 Jan 2011 (Rs)(H/L): Market Cap as on 04 Jan 2011 (Rs mn): Enterprise Value as on 04 Jan 2011 (Rs mn): 409.6 2297.95/392.60 48,927 55,124 Shares outstanding (mn) : Free Float (%) : Average daily volumes (12 months) : Beta (2 year) : 119.5 49.5 42,422 0.6

Britannia Industries Limited (BIL) was incorporated in 1918 as Britannia Biscuit Company Ltd. BIL operates in two segments -- bakery products (biscuits, bread, cakes and rusk) and dairy products (milk, butter, cheese, ghee and curd). The company’s facilities are located in Kolkata, Delhi and Uttarakhand. Dairy products sold under the Britannia Milkman brand are produced by Britannia Dairy Pvt Ltd.

Key Financial Indicators
R evenue (R s m n) E B ITD A m a rg ins (% ) P AT (R s m n) P AT m a rg ins (% ) G ea ring (x) E P S (R s /s ha re) P E (x) P /B V (x) R oC E (% ) R oE (% ) E V/E B ITD A (x) n.m. : Not meaningful Mar-08 27,830.8 8.3 1,765.5 6.3 0.6 73.9 17.9 4.9 28.2 31.0 14.6 Mar-09 34,314.5 6.5 1,434.5 4.2 0.5 60.0 23.3 5.1 22.7 22.2 16.0 Mar-10 37,871.9 4.0 1,033.2 2.7 3.9 43.2 9.5 5.3 14.1 24.7 10.5

KEY HIGHLIGHTS
Dominant player in the biscuit industry BIL is a leading player in the Rs 77 billion (as of March 2010) biscuit industry, with a market share of 36%. BIL’s biscuit portfolio comprises of glucose, marie, cookies, crackers, cream, milk and health biscuits. BIL mainly caters to the premium segment. However, with the launch of Tiger brand biscuits in 1997, it diversified into the low-end category as well. Its strong brand presence, extensive distribution channels and continuous product innovation have helped the company sustain its leading position in the industry. It has 600,000 outlets across India and has expanded its distribution network to rural areas as well. The company exports to the Middle East, Asia, the US and Australia. The company primarily caters to the domestic market; export sales are not significant. Outsourcing model saving operational cost BIL operates largely on the outsourcing model, sourcing nearly 65% of its total sales from contract manufacturers spread across the country. This leads to cost savings in the form of lower capital cost and reduced overheads (freight and labour costs), and extends the shelf-life of products as the company saves time in transport. Acquisitions increase footprint abroad In FY10, BIL acquired Strategic Food International Co LLC, a leading player in the Middle East in biscuits and wafers, and Strategic Brands Holding Co Ltd. In March 2010, it acquired Britannia and Associates (Mauritius) Private Ltd. In April 2009, the company entered into an agreement with M/s Fonterra Brands (Mauritius) Holdings Ltd, Mauritius, for acquiring 49% equity and preference shareholding in their JV Britannia New Zealand Foods Pvt Ltd. With this acquisition, BIL holds 100% stake in the dairy entity.

Shareholding (As on December 31, 2010)
DII 17% Others 22%

FII 10%

Promoter 51%

KEY RISKS

• • •

Intense competition from organised as well as unorganised Volatile raw material prices mainly sugar, wheat etc Climatic conditions, as major raw materials are sugar and wheat

Indexed price chart
(index ) 160 140 120 100 80 60 40 20 0 May-10 Nov-10 Mar-10 Aug-10 D ec -10 NIFTY F eb-10 J un-10 S ep-10 Apr-10 O c t-10 J an-10 J ul-10 ('000) 1400 1200 1000 800 600 400 200 0

Stock Performances vis-à-vis market
R eturns (%) YTD B R ITANN IA NIF TY
Note: 1) YTD returns are since April 1, 2010 to Jan 04, 2011. 2) 1-m, 3-m and 12-m returns are up to Jan 04, 2011.

1-m 1 3

3-m -5 0

12-m 23 17

28 16

V olumes (RHS )

B RITA NNIA

BACKGROUND
CRISIL COMPANY REPORT | 1

Britannia Industries Ltd
BIL was...
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