Britannia Industries Shares price review


Britannia shares price has performed almost 68.46 % growth post-COVID-19 Crash. Anyhow, the company has bagged a consistent growth when compared to YTD performance.

The YTD growth is also comparatively higher compared to other sector stocks of 18%. Recently, the company has announced its Q2’2021 result. The net profit of the company has grown 23% Y-o-Y with Rs. 495 Cr from the consolidated statement. Day after the results announcement, the share price has shed down 5.81%.

Amid all the challenges, the biscuit making FMCG company has shown an outstanding performance in terms of Net profit. Let us have a deep analysis of company growth and performance.


Also, have a look at Infosys shares result review.




Britannia was found in the year 1892 and originated in Kolkata. With 128 years of experience in the food and beverage industry, the company has almost 14 subsidiaries.

Strong today for a brighter tomorrow is the tag line on which the business is constructed. It is India’s No.1 most trusted food brand which completely focuses on biscuits, bread, and milk by-products.

The products have reached 22.3 Lakhs outlets as of Q2’2021 and 50% of Indian homes. The retail outlet was 15.5 lakhs outlets in FY2016-17. To increase the supply chain they have increased the outlets at a CAGR of 11.87% in the last 3 years.

Their products are categorized within Biscuit, Bread, Cake, Dairy Products, Rusk, Creme Wafers, and Croissant.

The Britannia biscuits are leading in market share in the biscuit industry. Biscuits account for a share of 75% of the total revenue of the company. It is predominantly lead by,

  • Good Day
  • Marie Gold
  • Milk Bikies
  • Little Heart
  • Crackers
  • Nutri Choice
  • Tiger
  • Bourbon
  • Pure Magic
  • Nice Time
  • Jim Jam & Treat

Bread products are most trusted by domestic customers. Britannia bread is the largest by market share in the organized bread market. It accounts for almost 450 Cr of business revenue. It accounts for 8% of total revenue. Their products in bread are,

  • Whole Wheat Bread
  • White Sandwich Bread
  • Bread Assortment
  • Daily Bread

Cake and Rusk account for almost 10% of the revenue. The cake and rusk products are,

  • Gobbles
  • Tiffin Fun
  • Nut & Raisin
  • Muffills
  • Layerz
  • Rollyo
  • FudgeIt
  • ToastTea

Dairy products account for almost 5% of the total revenue. Cheese leads in front of the dairy business. The other products are,

  • Milk Based Beverages
  • Fresh Dairy
  • Everyday Goodness

Other products like Wafers and Croissant accounts for 2% of total revenue


Please have a look at Procter and Gamble health and hygiene share review




The current strategy the company follows is “Striving for profitable Growth”. With this note, they follow 5 imperatives. They are,

  • Distribution and Marketing – They have enhanced distribution channels by increasing outlet and marketing channels by partnering with DUNZO. added to this they have introduced Britannia Store Locator, agile supply chain response, and innovative delivery solutions.
  • Innovation – In terms of innovation, bring new launches of products that will have a better future. Dairy products market share very high and there is a lot of work to be done. They have introduced Lassi, milkshake, etc in dairy beverages.
  • Cost Focus – They have undergone research on producing a cost-effective product by reducing,
      • Wastes
      • Distances to market
      • Market returns write-offs
  • Adjacent Business Plan – Company completely focusing on becoming foods company by,
      • Scaling up existing portfolios
      • Entering new categories
      • Business Contribution has come down by 90% to 75%. So other portfolios are picking up.
  • Sustainability – To build a sustainable business revenue, profit growth, and people retention.




  • Plans to meet growth in demand – Green Field (TN, UP, Bihar) and Brown Field (Odisha, Ranjangaon)
  • Dairy backend expected to be commercialized in FY22-23.
  • Evaluating Co-packaging Opportunities in Africa.
  • Monitoring Consumers insights and behavior which will be suitably incorporated in our medium-term strategy
  • Evaluating landscape on Laws – Labour Code, Farm Bill.




We have learned the complete business overview of the company and its focusing strategies. Now let leap towards the financial performance.

Financial Performance - Britannia Shares Price

From the above image, you can well articulate the year on year growth of the company in terms of revenue, EBITDA, PAT, and EPS.

  • The 5 years revenue has grown at a CAGR of 7.94%, which is higher than the industry growth. The industry growth is at a CAGR of 4.72%.
  • EBITA has grown at a CAGR of 13.93% in the last 5 years.
  • Net profit has grown at a CAGR of 15.3% in the last 5 years. The net profit is higher than the industry average.
  • They have increased the market share from 22.95% to 34.9% over the last 5 years.
  • The total revenue, EBITDA, Net profit, and EPS have degrown in Q2’2021 compared to Q1’2020. This is only because of panic buying happened in Q1’2021 due to lockdown. There is no other specific reason.
  • Even then, the Revenue has grown at a rate of 12.03% in Q2’2021 compared to Q2’2020.
  • Cash and cash equivalents are less than 1% of the total revenue. It accounts for only 81 Cr, which means, they don’t have liquid cash.




Total Number of Shares – 24.05 Cr shares

Market capital – Rs. 90,715.35 Cr.




The most important in the fundamental analysis is to understand the valuation ratios

  • Book Value – Rs. 183.09
  • Price to Book Value (P/B) – 20.6
  • Earning Per Share (TTM) – 74.47
  • Price to Earnings (P/E) – 50.65 (Highly Expensive)
  • Industry P/E – 42.56
  • Dividend Yield – 0.93%
  • 5 years EPS Growth – 15.22%
  • Debt to Equity Ratio – 0.35 (It has increased from 0.04 to 0.35 – Makes Liquidity Crunch)
  • Current ratio – 1.43 (coming down year on year)
  • Interest Coverage ratio – 24.98 (Degrown by 87%)
  • Return on Equity – 31.87%
  • Net profit Margin – 11.81%
  • Free Cash Flow – 1241.09 Cr
  • Enterprise Value/EBITDA – 44.65 (Very Expensive)




  • Promoters – 50.58%
  • FII – 16.03%
  • Financial Institutions – 0.14%
  • Insurance Companies – 4.62%
  • Mutual Funds – 6.48%
  • Other DII’s – 6.76%
  • Retail Investors – 15.4%




Total liquid Asset:

  • Fixed Assets:
      • Investments: Rs. 1882.98 Cr
      • Other Financial Assets: Rs. 31.33 Cr
  • Current Assets:
      • Investments: Rs. 1008.77 Cr
      • Cash and Cash Equivalent: Rs. 81.23 Cr
      • Bank Balance: Rs. 41.62 Cr
      • Other Financial Assets: Rs. 229.75 Cr

Total Liquid Assets: Rs. 3275.68 Cr


Total Liabilities: Rs. 3403 Cr


Excess Liquid Cash: (Rs. 127.31) Cr [Negative Asset]


Excess Liquid Cash per Share: (Rs. 5.3) per Share




The 5 years EPS growth is 15.22%

The 5 years Revenue growth is 7.94%

Last one Year Revenue growth is 5.46%

1 year EPS growth is 18%.


Let us assume, in the same way, the Company grows with 5 Years EPS trend of 15.22, with a margin of safety of 20%. The margin of safety is taken 20% because the share price is 1.16 times higher than Nifty 50. Also, increasing high debt and low cash and cash equivalents.


So, the Intrinsic value should be less than Rs. 1321 per share.

The current share price is 185% higher overvalued than the intrinsic value.




  • As an investor, you should look at the company’s debt, more than revenue. Britannia had 0.35 as a Debt to Equity ratio. In Q2’2021, they have increased their debts by 996%.
  • The company has Excess liquid cash is negative, due to low cash and cash equivalent. This will lead to a liquidity crunch.
  • Even though the market leader in the biscuit industry will be growing at a CAGR of 5-7% a year. The share price is too high for a fundamental or contrarian investor to buy at this share price.
  • A clear focus on business and innovation are seen as per their focused strategy. Impressive financial performance, but very high P/E and EV/EBITDA ratios.
  • A good company to invest in, but you should wait till the share price comes down to intrinsic value.



Leave a Comment