CHAIRMAN:

Mr. Nusli N Wadia

MANAGING DIRECTOR:
Mr. Varun Berry

Urijit Patel

6 holding companies;
The Mumbai-based Wadia group held more than 50% stake in Britannia as on March 31, 2022.

Management discussion and analysis.

* The recurring Covid 19 pandemic and the Russian Ukrain war has afftected Britania’s business. The
company said: dealing with rising input cost in a low demand environment was the critical challenge
confronting business during the year.

* The rise in prices of essential raw materials for Britania like refines plam and crude oil are particularly
important for their business. The Russian Ukrain war further aggrevated the situation.

*The company said that the broader economical trends are expected to have a direct impact on the company’s
growth prospects.

*Inflation is expected to remain elevated in the near future due to the ongoing russia ukrain war.

*The anticipated increase of interest retes by the central banks in the coming quarters are expected to lower
growth and exert pressure on economies specially that of emerging markets.

*The company faces the risk of consumer not spending enough and becoming value conscious due to the current
economical situation.

*Looking forward, the company’s performance depends on how well the company is able to manage its cost in
the current inflationary environment and how well it is able to market its products.

Bonus Debenture Committee of the Board of Directors of the Company at its meeting held today i.e., Thursday,
3rd June, 2021 inter alia approved the allotment of unsecured, non-convertible, redeemable, fully paid up
debentures having a face value of Rs. 29 each - INR 698,51,80,584 (Indian Rupees Six Hundred Ninety Eight
Crores Fifty One Lakhs Eighty Thousand Five Hundred and Eighty Four)
Commercial papers amounting to Rs.1000 cr were redeemed during the year
there were no borrowings from directors, members and banks/public financial
institutions during the year;
there had been no alteration of the provisions of the Memorandum and/ or
Articles of Association of the Company during the year.
2018-

Britannia Brands and Leila Lands had floated a joint venture (JV), Associated Biscuits International Ltd, which
is a 100% subsidiary of Associated Biscuit International Holding and holds 50.96% in Britannia Industries

Instrument Category:Long Term

Ratings: CRISIL AAA
Outlook: Stable as of July 06, 2022
Instrument Category: Short Term
Ratings : CRISIL A1+
Total Bank Loan Facilities Rated Rs.2000 Crore (Enhanced from Rs.1000 Crore)
Long Term Rating CRISIL AAA/Stable (Reaffirmed)
Rs.500 Crore Non Convertible Debentures CRISIL AAA/Stable (Reaffirmed)
Rs.720 Crore Non Convertible Debentures CRISIL AAA/Stable (Reaffirmed)
Rs.500 Crore Non Convertible Debentures CRISIL AAA/Stable (Reaffirmed)
 Rs.1279 Crore Commercial Paper CRISIL A1+ (Reaffirmed)

Key Rating Drivers & Detailed Description

Strengths:
Established market position in the domestic fast-moving consumer goods (FMCG) industry:
Britannia is a leading player in the Indian biscuit industry, with a market share of over a third in value terms.
Revenue has registered a compounded annual growth rate of 8% over the five fiscals through March 2022. The
company has a diversified portfolio.
Market position is further supported by a wide distribution network in both rural and urban areas.
Strong financial risk profile:
The financial risk profile is marked by a healthy capital structure, strong debt protection metrics, and financial
flexibility. Though steady cash flow and net cash accrual support gearing, it has moderated to 1.01 times as on
March 31, 2022, due to the large dividend payments and issue of bonus debentures over fiscals 2021 and 2022.
Expected net cash accrual of Rs 500-800 crore should keep gearing under 1 time. Estimated capex of Rs 800-
1,000 crore per fiscal will be funded through internal cash accrual and external debt. Dividend payments are
likely to moderate over the medium term, in line with other FMCG players. However, any substantial payout
remains a key monitorable.
Weaknesses:
Exposure to intense competition in the FMCG industry:
Intense competition has reduced the scope for FMCG players to pass on any hike in raw material prices to end-
users. While Britannia has fairly retained its competitive position and pricing, CRISIL Ratings believes that
competitive intensity will remain high with fresh product launches from players, especially in the premium
segment.
Susceptibility of profitability to fluctuations in raw material prices:
Prices of key raw materials such as wheat, sugar, milk and refined palm oil depend on geo-climatic conditions,
international prices and the domestic demand-supply situation. In fiscal 2022, overall commodity inflation was
high with year-on-year inflation on flour at 1%, sugar (7%), refined palm oil (26%), cashew nuts (25%), and
that on laminates and corrugated boxes at 20% and 21%, respectively.
The management has rolled out absolute price hikes and grammage cuts to offset cost inflation. Continued focus
on cost efficiencies and price leadership will help the company mitigate the impact of volatility in raw material
prices on the operating margin. However, the ability to pass on the increased cost, while maintaining market
share, is a key rating sensitivity factor.
Liquidity: Superior
The company is likely to maintain its cash surplus (around Rs 1,019 crore as on March 31, 2022), backed by
internal accrual. Exposure of about Rs 740 crore towards group entities as on the same date, may not increase
materially in the near term. Bonus debentures amounting to Rs 721 crore are redeemable in fiscal 2023, and
will be covered through the cash surpluses, internal accrual and debt. Hence, CRISIL Ratings believes that
Britannia will maintain superior liquidity for business requirements, covering its working capital and capex.
Outlook: Stable
CRISIL Ratings believes Britannia will maintain its strong market position in the biscuit industry, backed by
strong brands and an established distribution network.
Rating Sensitivity factors
Downward factors
Substantial decline in operating margin from current levels of 15-16%
Any large debt-funded capex or acquisitions, material increase in dividend payout or exposure to group
companies, impacting liquidity and financial risk profile.

Discussion with ANALYSTS

Avi Mehta: With these price hikes in to cover the inflation and with cost saving benefits starting to focus
clearly in place, would it be fair to expect EBITDA margin to normalize to pre-COVID levels
in the second quarter or do you think it'll take some time more?
Varun Berry: No, I would think that normalization is around the corner.

Avi Mehta: Lastly with your permission on bookkeeping, the number of ICDs in this quarter that's all from
my side. Thank you.
N. Venkataraman: As of 31st March, it was 740 crores and as of 30th of June it is 690 crores.

Shirish Pardeshi: Any further CAPEX you have planned on dairy?

Varun Berry: No there's no more CAPEX.
CAPEX whatever has been committed will continue. In addition to that we are putting up
three factories. I think I spoke about it last time as well. We are extending our Orissa factory.
We are putting up a factory in UP which should be ready by next year beginning. We are putting
up a factory in Tamil Nadu and Thirunelveli and we are also looking at one more factory which
will be commercialized a little later which is in Bihar. These are the four that we are working on
and obviously the work on Ranjangaon continues. The UP and the Tamil Nadu factory are going to be
approximately 300 crores each. The Bihar
will probably be slightly lower than that. The extension in Orissa is not going to be too much.
Ranjangaon we have already committed 1,500. We are almost at about 1,200-1,300 now.

For the year ended ` 31 March 2022 31 March 2021

Capital expenditure 0.60 0.25

200CR DIVIDEND PAYMENT TO RELATED PARTIES

Trademark was not written off,

Share Appreciation Rights (SAR) - Phantom Option Scheme

The Phantom option scheme creates an opportunity to link the employee reward to Company’s share price
performance. Under this plan, Company grants stock appreciation rights to select employees. Cash pay-out
equivalent to the appreciation in the value of shares will be made when exercised after vesting period.