Smart Cookie

Britannia’s Varun Berry makes the most of the rally in the stock

The Nusli Wadia-owned FMCG major Britannia Industries has been an investor favourite, what with the stock gaining 38% over the past one year against the 14% gain clocked by the benchmark Sensex. The performance has also come on the back of robust numbers from the company. Over FY12-FY17, Britannia’s net sales have shown a CAGR of 10.5%, while profit saw an impressive CAGR of 35%. In FY17, sales and profit grew by 8% and 7%, respectively.

Even as the Street savoured the growth, managing director Varun Berry, who has been instrumental in turning around the fortunes of the company, has encashed a part of his holding. Between June 20 and July 12, Berry sold close to Rs.29 crore worth of shares. In all, 86,740 shares were sold at an average price of Rs.3,320.81 a share. Following the stake sale, as per the latest filing with the exchanges, Berry holds less than 9,000 shares. The previous big sale from Berry was in 2016, when he sold over a lakh shares for close to Rs.30 crore.

Incidentally, the holding of the promoter group has largely remained unchanged at 50.73%, as on March 2017, against 50.74% as on March 2016. But the big jump has come from foreign portfolio investors, who have significantly increased their holding over the same period from 6.51% to 11.01%. On the domestic front, mutual funds, too, increased their stake from 6.16% in FY16 to 6.7% in FY17, with ICICI Prudential Value Fund – Series 4 holding a prominent 1.67% stake as of March 2017. Insurance companies have also increased their holding from 2.97% to 4.71%. While Life Insurance Corporation of India increased its stake from 1.02% to 1.39%, General Insurance Corporation of India marginally reduced its stake from 1.03% to 1.02%.

While the firm’s biscuit segment continues to grow steadily, its bread, dairy and international segments have shown muted growth. The steep rise in the price of inputs has, of late, impacted margins. As per Ace Equity data, Ebitda growth has declined from 40.6% in FY16 to 6.72% in FY17. Going ahead, the firm’s focus on widening its product portfolio and distribution channels coupled with its strategic partnerships is expected to restore buoyancy across different segments. The firm’s joint venture with Greek firm, Chipita, for manufacturing and selling of croissants is also expected to go on stream by July 2018. 


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