March 13, 2019
Britannia has outperformed its peers Godrej Consumer Products 9GCPL), Dabur and Marico.
Nearly after 14 years, Britannia is re-entering the standards of Nifty index end of this month to become the third FMCG Company on the indicator of share index. Parenthetically, it will be the ‘only foods’ company alone in the index.
The company’s U-turn under Varun Berry, appointed as Britannia’s head in 2013, made sure that it performed well in its strategic food segments, creating Rs. 68,000 crore of wealth for stakeholders.
The organization climbed profitable growth through launch of new food categories, increasing its dairy business, venturing in global markets, attaining cost efficiency, acquiring distribution impetus and cumulative innovations.
In the last five financial years, Britannia’s net sales has increased at a compound annual growth rate of nearly 10 per cent – higher than its counter-players. Its net profit swelled at a CAGR of 31 per cent – double the growth rate of Godrej Consumer Products (GCPL) and Marico.
According to the growth review, Britannia and GCPL are similar on some accounts (similar revenues and market cap), Britannia has an edge over GCPL. It has a higher return on capital employed and a higher free float.
GCPL, on the other hand, has better operating margin profile, but lower returns on capital employed and lower valuations. Its stock remained dull over the past one year while ET FMCG Index rose 14 per cent and the Britannia stock surged 29 per cent.