Britannia Industries (BRITANNIA) Q4 05/06 earnings summary

Executive summary

• Gross sales rose 13% to Rs 18,179 mn; operating profit increased 7% to Rs 1,762 mn, while profit after tax fell 2% to Rs 1,464 mn after exceptional items.

• Market share held at 31.7% by volume and 38.8% by value amid intense competition and higher commodity and fuel costs.

• Six new products were launched, the Rudrapur factory began commercial production, and supply-chain initiatives supported growth and cost control.

Financial highlights

• Gross sales reached Rs 18,179 mn, up 13% YoY; net sales were Rs 17,133 mn versus Rs 15,095 mn.

• Operating profit was Rs 1,762 mn, up 7%; operating margin was 10.3% versus 10.9%, pressured by input inflation.

• PBT before exceptional items was Rs 1,958 mn, down 19%; PBT after exceptional items was Rs 2,007 mn, down 9%.

• PAT after exceptional items was Rs 1,464 mn, down 2%; EPS was Rs 59.96 versus Rs 60.59.

• Excluding exceptional items, PAT was Rs 1,432 mn versus Rs 1,466 mn; NOPAT increased 19%, reflecting operating management.

Outlook and guidance

• Biscuit industry growth of 11–13% was expected to continue into the coming year, supported by economic buoyancy and consumer demand.

• Commodity and fuel prices were expected to remain high, with aggressive pricing and promotions likely to pressure industry profitability.

• Priorities included profitable growth through brand, pack and channel mix; further investment in brands, supply-chain efficiency and adjacent bakery categories.

• Capacity expansion was continuing at Rudrapur and other manufacturing locations to meet buoyant demand.