May 14, 2005

Checking on Britannia industries

Started looking at britannia industries. It is selling for around 14 times FY05 earnings. The bottom line seems to be growing in low teens. There is very low debt on the balance sheet. In addition found the following interesting
- 30 % ROE
- almost 100 Rs / per investment - need to figure out what is this investment ( net of debt )
- Very high asset TO ratios.
- good free cash flow
- slight improvement in the margin (which seem adequate for an FMCG company )
- strong brands , extensive distribution network, good history of new products

What i still need to figure out
- The NP growth is almost to the tune of 30 % for the year. How sustainable is it ?
- Competitive scenario - ITC / HLL entry into brakery business, how will it impact britannia
- How will the management handle the free cash flows ? will they continue share buybacks or make some bad accquisitions or investments ( need to figure out these investments)

One the strangest points is that britannia does not have a website. How can a 1000 crore + company not have a website ? So it is diffcult to get their annual report

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