Britannia Industries Limited, one of the leading food companies in the country has announced its Quarterly Results for Q1FY22 on Friday 30th July 2021. Here is the detailed analysis of the Q1FY22 Result of the company along with its Conference/Earnings Call Highlights.
Q1FY22 Result Analysis: Britannia Industries Share Price
1) Q1FY22 Result: Britannia Industries Share
The Total Revenue from Operations of the company has remained flat on yearly basis. The Total Revenue from Operations of the company is Rs. 3,421 Cr. in Q1FY21 which is now down by 0.5% YoY to Rs. 3,403 Cr. in Q1FY22. Sequentially, this has gone up by 8.7% from Rs. 3,310 Cr. in Q4FY21.
The EBITDA of the company has also gone down significantly by 22.8% YoY to Rs. 554 Cr. in Q1FY22 from Rs. 717 Cr. in Q1FY21. Quarter on Quarter, this number has gone up by 9.6% from Rs. 505 Cr. in Q4FY21.
The EBITDA Margin of Britannia Industries stood at 16.3% in Q1FY22 against 21% in Q1FY21 down by 470 bps YoY. Sequentially, the EBITDA Margin expanded by 20 bps from 16.1% in Q4FY21.
The Profit Before Tax (PBT) of the company for the quarter ended 30th June 2021 is Rs. 531 Cr. against Rs. 737 Cr. in the quarter ended 30th June 2021 down by 28% YoY. And Quarter on Quarter, PBT of the company has gone up by 7.8% from Rs. 493 Cr. in the Quarter ended 30th March 2021.
The company has reported a loss in the first quarter of FY22. The Net Profit of the company has gone down by 28.6% YoY to Rs. 389.5 Cr. in Q1FY22 from Rs. 545.7 Cr. in Q1FY21. Sequentially, the Net Profit of the company has increased by 7% from Rs. 364 Cr. in Q4FY21.
The Net Profit Margin of Britannia came down to 11.4% in Q1FY22 down by 460 bps YoY and 20 bps QoQ.
Britannia Industries- Q1FY22 Result
2) Efficient Distribution System: Britannia Industries Analysis
The Company managed to sustain its direct reach even during the second wave of the Covid-19 Pandemic. As of June 2021, the company has a direct reach in 20.8 lakh outlets, which was 23.7 lakhs in Q4FY21.
The Rural Distribution System also remained unbeaten and remains as per the levels of March 2021. As of 30th June 2021, the Rural Dealers are at around 23,000 same as the previous quarter.
Growth Channels is at 1.12X in 2021-22 against 1X and 0.96X in FY20 and FY21 respectively.
Britannia Industries- Efficient Distribution System
3) Revenue/Operating Profit Trend: Britannia Industries Growth
Revenue of the company has also increased gradually from Rs. 2,677 Cr. in Q1FY20 to Rs. 3,384 Cr. in Q1FY21 and finally to Rs. 3,352 Cr. in Q1FY22.
The Operating Profit of the company has grown from Rs. 350 Cr. in Q1FY20 to Rs. 669 Cr. in Q1FY21. But Post Q1FY21, the Operating Profit has fallen to Rs. 453 Cr. and Rs. 505 Cr. in Q4FY21 and Q1FY22 respectively.
The Operating Profit Margin of the company has remained at a similar level of around 14%-16% since the last 8 quarters. The company witnessed a light rise in revenue during Q1FY21 and Q2FY21.
Britannia Industries- Revenue/Operating Profit Trend
4) Adjacency Businesses: Britannia Industries PE Ratio
Export container availability impacted growths.
Distribution system revamps in the Middle East.
Nepal continued to grow in double digits.
ii) Adjacency and Dairy:
In-home consumption categories fared well, while on the go was impacted.
Flat Wafers and Rolls plant to be operational this quarter.
Milk collection at 2X of last year to gear up for the backend.
Earnings Call Highlights:
The business continued to gain market share.
Continued focus on Strategic Planks: Innovation, Distribution & Marketing, Cost Focus, Adjacent Business, and Sustainability.
Aggressive marketing activities as compared to the first quarter of the previous year.
No cuts in Advertising Expenses. Started 3rd round of advertising in July.
Operations are fully on stream.
The second wave of Covid-19 did not affect highly to the supply chain of the company. But Front end business was affected, which is now in recovery mode.
Adjacent Category would be around Rs. 2,500 Cr. And Dairy is about 5% of the Total Mix.
The company got 8 lines that are fully operational in Rangan Gaon.
Besides this, the company is putting up a rusk line and biscuits as well.
Also, Britannia is putting up a Dairy Facility which should be ready by Q2FY22.
Investment in one of the Adjacent businesses is around Rs. 650 Cr. which is generating a revenue of Rs. 1,200 Cr.
The other 2 lines will yield a turnover of around Rs. 1,500-1,600 Cr. on current investment when fully used.
Maharashtra Government giving 110% incentive for investment in the Adjacent Plant hence it will come back to the company in the form of Tax Benefits.
ICD as of 30th June 2021 stands at about Rs. 470 Cr. for the 2 group companies. The same was Rs. 790 Cr. in March 2021.
Rise in e-Commerce sales from 0.5% to 2% and plans to take it to the level of 5%.
The company will expand the production technology to the other 3 plants in the country which will be ready by the end of Q2FY22 or the beginning of Q3FY21.
The business witnessed a rise in Crude Oil prices.
The company has taken price actions with a cautious approach.
Besides price increase action, the management was very focused on the cost-efficiency side.
Launched 2 new products in Q1FY22: Goodday Chocochip and Britannia 5050 Potatoes
Products to launch in the coming 6 to 12 months are Wafer Sticks, Milk Biki Classics, and a few other NutriChoice products.
The company changed its distributor in the middle east and appointed a new one in Q1FY22, which faced a little disruption.
Britannia has become a market leader in Nepal but eying on being a dominant player.
The company plans to increase revenue by around 26% in Nepal.
Expansion of Kurda Plant.
New Plant in Tamil Nadu due to lack of short-term capacity in the state.
Bought a plant in Barabanki, UP received incentives from UP Government as well.
The CAPEX for FY22 will be around Rs. 130-140 Cr.
The company has applied for PLI Scheme under the Ready to Eat, Ready to Cook category.
Please find attached for Detailed Analysis.
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