Britannia Industries Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are covered by earnings (1.7x coverage).
• Dividends after 3 years are expected to be well covered by earnings (2.2x coverage).
• Dividends per share have been stable in the past 10 years.
• Britannia Industries's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Britannia Industries's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Britannia Industries's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Britannia Industries's earnings are expected to exceed the low risk growth rate next year.
• Britannia Industries's earnings are expected to increase by more than the low risk growth rate in 3 years time.
• Britannia Industries is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
• Performance (ROE) is expected to be above the current IN Food industry average.
• Britannia Industries's revenue growth is expected to exceed the India market average.

Cons

• Cash flow for Britannia Industries is expected to increase but not above the 50% threshold in 2 years time.
• Britannia Industries's earnings are expected to grow by 13.4% yearly, however this is not considered high growth (20% yearly).
• Britannia Industries's earnings growth is positive but not above the India market average.
• Britannia Industries's net income is expected to increase but not above the 50% threshold in 2 years time.
• A decline in Britannia Industries's performance (ROE) is expected over the next 3 years.
• Britannia Industries's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Britannia Industries's revenue is expected to grow by 10.2% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Britannia Industries is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Britannia Industries is profitable, therefore cash runway is not a concern.
• Britannia Industries is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (96.8%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 2.4x debt.
• Britannia Industries's cash and other short term assets cover its long term commitments.
• Britannia Industries earns more interest than it pays, coverage of interest payments is not a concern.
• Britannia Industries's level of debt (34.6%) compared to net worth is satisfactory (less than 40%).

Cons

• The level of debt compared to net worth has increased over the past 5 years (12.6% vs 34.6% today).
• High level of physical assets or inventory.

management

Pros

• The average tenure for the Britannia Industries board of directors is over 10 years, this suggests they are a seasoned and experienced board.
• Varun's remuneration is about average for companies of similar size in India.
• Varun's compensation has been consistent with company performance over the past year, both up more than 20%.

Cons

• Britannia Industries individual insiders have sold more shares than they have bought in the past 3 months.
• The average tenure for the Britannia Industries management team is less than 2 years, this suggests a new team.

misc

Pros

Cons

• Britannia Industries has significant price volatility in the past 3 months.

past

Pros

• Britannia Industries's 1-year earnings growth exceeds its 5-year average (21% vs 13%)
• Britannia Industries's year on year earnings growth rate has been positive over the past 5 years.
• Britannia Industries used its assets more efficiently than the IN Food industry average last year based on Return on Assets.
• Britannia Industries has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
• Britannia Industries's earnings growth has exceeded the IN Food industry average in the past year (21% vs 20.5%).

Cons

• Britannia Industries's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).

value

Pros

• 500825 outperformed the Market in India which returned -14.5% over the past year.
• BSE:500825 is up 7.1% outperforming the Food industry which returned 5% over the past month.
• BSE:500825 is up 7.1% along with the India market (8%) over the past month.

Cons

• Britannia Industries's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Britannia Industries's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Britannia Industries is overvalued based on assets compared to the IN Food industry average.
• Britannia Industries is poor value based on expected growth next year.
• Britannia Industries is overvalued based on earnings compared to the IN Food industry average.
• Britannia Industries is overvalued based on earnings compared to the India market.
• 500825 underperformed the Food industry which returned 18.8% over the past year.