Financial Daily from THE HINDU group of publications
Monday, Jan 28, 2002
Financial Daily from THE HINDU group of publications Monday, Jan 28, 2002 |
|
|
|
|
|
Corporate
-
Food & Dairy Products Tamed Tiger may keep Britannia's growth on leash Abhrajit Gangopadhyay
BANGALORE, Jan. 27 A SLOWING sales in Tiger biscuits coupled with not-so-satisfactory growth of the flavoured milk segment under the umbrella MilkMan brand could slow down bakery major Britannia's net profit for the December quarter, analysts say. "Tiger is showing signs of maturity with growth screeching to 5-6 per cent from double digit figures a year ago,'' Mr Rajesh Kothari, FMCG analyst with Khandwala Securities, said. Tiger, the main volume driver for Britannia clocked a growth rate in the range of 12-14 per cent for the last couple of years. However, the growth has now plateued with "not any brand showing promise for effective back-ups,'' Mr Kothari said. According to a poll of seven brokerages conducted by the Business Line, Britannia's third quarter profit is likely to be in the range of Rs 20.8 to 21.2 crore over a sales of Rs 358.3 to Rs. 359 crore. The firm reported a net profit of Rs 25.3 crore over a sales of Rs 350 crore in the September quarter. The shrink in net profit could also be due to some provisioning seen in December quarter. However, there is some scope of increase in operating margins which could go up 11.2 per cent in the December quarter, up from 10.9 per cent a quarter ago, analysts said. "There is scope for the dairy business to grow faster than the biscuit segment,'' Mr John Band, head of research, ASK-Raymond James said. The firm's plan to set up a joint venture with New Zealand's Fonterra Co-Operative on processed milk products could spur growth upside in the short term. Dairy products contribute close to 10 per cent to Britannia's revenue. Indian biscuit market grows annually at 5-6 per cent with almost 55 per cent of organised sales coming from the low-priced glucose segment. Britannia, with its several brands such as Milk Bikies, Tiger, Marie-Gold and 50:50, has a robust portfolio in that segment. Moreover, new brands such as Maska-Chaska could be the new triggers for growth, analysts said. "Since the base is small, growth will be very large for Maska-Chaska, but how far it would be a volume driver is yet to be ascertained,'' an analyst with a foreign mutual fund said. However, analysts ruled out any gross downsides in the Britannia stock tracking this concern. Britannia was among the few FMCG stocks that bucked the trend in a dismal market last quarter. A recovery in the FMCG sector is seen early this year on the back of a bumper rabi crop February harvest.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|