BIRTANNIA INDUSTRIES

The stock yesterday hit a new high at Rs.774.80 on the back of its very good numbers for Q1FY14. This is the second consecutive quarter where the company, the maker of ‘Tiger’ and ‘Britannia’ brand of biscuits and other baked products has reported such good numbers. An improvement in product mix, higher price realizations and cost management led to the company ending the quarter with a 93% rise in consolidated net profit at Rs.89 crore. This was on a 14% jump in net revenue at Rs.1540 crore. But QoQ, the performance has shown a decline, with net profit falling 2% and net revenue down over 6%.

YoY, margins have shown a major improvement, up from 4.7% to 7.7%. Tight cost controls have helped as sequentially, operating costs have dropped 6%. Advertisement and sales promotion cost QoQ rose 2% and YoY, it was up 27%. Interest costs have come down sharply at Rs.3.35 crore, down 64% YoY and down 68%. The company has appointed a consultant to create new products. In the coming months we could see new launches, differentiated products and packaging, upgrading existing offerings and also explore new ingredients and processes. The lower cost of wheat and sugar is also helping the margins. With good monsoon , things on all fronts look good for the company.