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Fm Assignment

Britannia Industries Limited is a leading FMCG company in India, known for its bakery and dairy products, with a strong market presence both domestically and internationally. The financial analysis indicates consistent revenue growth, robust profitability, and a healthy balance sheet, although there are potential risks related to rising debt and cost sensitivity. The investment recommendation is to 'BUY' for long-term hold, given the company's strong fundamentals and market expansion opportunities.

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3 views11 pages

Fm Assignment

Britannia Industries Limited is a leading FMCG company in India, known for its bakery and dairy products, with a strong market presence both domestically and internationally. The financial analysis indicates consistent revenue growth, robust profitability, and a healthy balance sheet, although there are potential risks related to rising debt and cost sensitivity. The investment recommendation is to 'BUY' for long-term hold, given the company's strong fundamentals and market expansion opportunities.

Uploaded by

hsatish442
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Prepared By,

Name -: Yash Satish Raskar


Roll No -: 118
Div -: B
Subject -: Financial Management

Practical Assignment Title: Financial Statement Analysis of


[Britannia Industries] Using Screener.com
1. COMPANY OVERVIEW

Britannia Industries Limited is one of India’ s leading food companies,


primarily operating in the FMCG (Fast-Moving Consumer Goods) sector.
Founded in 1892 and headquartered in Kolkata, the company is renowned
for its extensive range of bakery and dairy products, including biscuits,
bread, cakes, rusks, cheese, milk, and yogurt. Britannia owns several
popular brands such as Good Day, Marie Gold, NutriChoice, Bourbon, and
Milk Bikis, which have become household names in India.

The company has a pan-India presence, reaching over 5 million retail


outlets and serving more than half of Indian households. Britannia has also
expanded internationally, with a growing footprint in over 70 countries
across the Middle East, Africa, and South Asia. Its business model revolves
around large-scale manufacturing, strong supply chain efficiency, brand
loyalty, and continuous product innovation.

Industry: FMCG (Fast-Moving Consumer Goods)

Business Model: Britannia is a leading food company, primarily


known for its bakery products, dairy, and snacks.

Products/Services: Biscuits (Good Day, Marie Gold, Bourbon),


cakes, rusk, dairy products (milk, cheese, curd).

Market Presence: Operates across India with exports to more


than 70 countries.

Key Milestones & Developments:

• 2022-23: Entered into the fast-growing packaged dairy segment


aggressively.

• 2023: Partnered with Bel Group (France) to expand cheese offerings.

• 2024: Focus on sustainability initiatives (eco-friendly packaging,


renewable energy usage).
2. FINANCIAL STATEMENT ANALYSIS

A. Profit & Loss Statement Analysis

1. Revenue Growth Trend: 2. EBITDA, EBIT, and Net Profit


Trends:

3. Profit Margins (in %): 4. Earnings Per Share (EPS)

-
B. Balance sheet Analysis :

1. Total Assets, Liabilities, and Shareholders Equity (Mar 2024).

A. Total Assets : 8371 Cr.


B. Liabilities : 8371 Cr.
C. Shareholders Equity : 3527 Cr.

2. Debt-to-equity ratio & Financial Leverage

A.Debt-to-equity ratio :

Formula : Total Borrowings = 2,040 = 0.58


Shareholders Equity 3,527

B. Financial Leverage :

Formula : Total Assets = 8,371 = 2.37


Shareholders Equity 3,527

3. Working capital analysis

A. Current Ratio
Formula : Current Assets = 2,991 = 1.07
Current Liabilities 2,804

B. Quick Ratio
Formula : Current Assets-Inventory = 2,991-598 = 0.85
Current Liabilities 2,804
C. Cash Flow Analysis

A. Operating cash flow trends.

B. Free Cash Flow (FCF) and its implications.

FCF = Operating Cash Flow – Capital Expenditure (CapEx)


C. Capital expenditure trends.

Year Investing Cash CapEx Innterprterpretation


Flow

Mar 2020 -1,568 High CapEx-Major


Investment

Mar 2021 +486 Low CapEx / Possible


Assets Sale

Mar 2022 +931 Very Low CapEx /


Divestment
High CapEx- Expansion
Mar 2023 -1,386 Phase
Low CapEx / Investment
Mar 2024 +507 Proceeds
3. Ratio Analysis

● Profitability Ratios (ROE, ROA, ROCE)

1. ROE :
Formula = Net Profit × 100 = 2,082 × 100 = 59.03%
Shareholders Equity 3,527

2. ROA :
Formula = Net Profit × 100 = 2,082 × 100 = 24.87%
Total Assets 8,371

3. ROCE :
Formula = EBIT × 100 =3,007× 100 = 54.01%
Capital Emploeyed 5,567

● Liquidity Ratios (Current Ratio, Quick Ratio)

1.Current Ratio
Formula : Current Assets =2,991 = 1.07
Current Liabilities 2,804

2. Quick Ratio
Formula : Current Assets-Inventory = 2,991-598 = 0.85
Current Liabilities 2,804

● Solvency Ratios (Debt-to-Equity Ratio, Interest Coverage


Ratio)

1. Debt-to-equity ratio :
Formula : Total Borrowings = 2,040 = 0.58
Shareholders Equity 3,527

2. Interest Coverage Ratio


Formula : EBIT = 3,007 = 19.9
Interest Expense 151
● Efficiency Ratios (Asset Turnover Ratio, Inventory Turnover
Ratio)

1. Asset Turnover Ratio :

Formula : Sales = 16,186 = 1.93


Total Assets 8,371

2. Inventory Turnover Ratio

Formula : COGS = 13,115 =22.2


Average Inventory 590.8
4. Peer Comparison

● Compare key financial metrics with industry peers.

● Identify strengths and weaknesses relative to competitors.


Strengths –

1. Lower P/E (57.02): More attractively valued than Nestlé.


2. Higher Dividend Yield (1.46%): Better for income investors.
3. Positive Profit Growth (3.08%): Outperformed Nestlé’ s
decline.
4. Stronger Sales Growth (7.7%): Indicates solid demand.

Weaknesses –

Lower ROCE (52.74%): Less efficient than Nestlé (169.08%).


Smaller Market Cap: Rs. 1.21 lakh Cr vs. Nestlé’ s 2.18 lakh Cr.
Lower Profit: Rs. 557 Cr vs. Nestlé’ s Rs. 696 Cr.
5. Investment Decision & Conclusion

● Summary of key findings.

Britannia Industries has demonstrated consistent revenue


growth over the past five years, reflecting its strong market
presence in the FMCG sector, especially in the bakery and
dairy segments. Profitability indicators such as EBITDA and
Net Profit have shown positive trends, though with some
fluctuation in margins due to raw material cost volatility. The
company maintains a robust balance sheet with low debt
levels and healthy liquidity ratios. Cash flows from operations
have remained strong, indicating solid core business
performance.

● Potential risks :

1. Rising Debt: Borrowings jumped from ₹1 Cr (FY19) to ₹2,040


Cr (FY24).
2. Tax Volatility: Tax rate fluctuations (22%–35%) affect margin
predictability.
3. Cost Sensitivity: Vulnerable to raw material price hikes.
4. High Payouts: >80% dividend limits reinvestment capacity.

Opportunities :

1. Strong Brand: Well-known brands ensure pricing power and


loyalty.
2. Market Expansion: Growth potential in rural and Tier 2/3
cities.
3. Product Innovation: New offerings can boost revenue.
4. Global Reach: Expanding exports reduce domestic
dependency.
● Recommendation on whether the company is a good
investment based on financial data.

Investment Recommendation

Based on the financial analysis, Britannia Industries appears to


be a fundamentally strong company with solid profitability,
minimal debt, and consistent cash flows. Its ability to maintain
high returns on capital while expanding its market makes it a
sound long-term investment. Despite short-term input cost
pressures and competition, its strong brand equity and
operational efficiency provide resilience.

Recommendation: BUY (Long-term Hold)

Reference :

https://www.screener.in/company/BRITANNIA/consolidated/#
balance-sheet

https://en.wikipedia.org/wiki/Britannia_Industries

https://www.britannia.co.in/

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