Long Term Buy Call For Britannia Industries: StocksIdea.Com

Britannia-IndustriesThe Company was incorporated on 21st March, as a public limited company under the Indian Companies Act, VII of 1913. In 1921 Company obtained a priority of Certificate and imported new machinery thereby becoming the first biscuit company in India to install and run a gas oven plant. A new factory was established at Kasara Pier Road in Mumbai in 1924. In the same year, the Company became a subsidiary of Peek, Frean & Co. Ltd., U. K., a leading biscuit manufacturing company, and further strengthened its position by expanding the factories at Calcutta and Mumbai. From 1939 to 1945, large part of the Company's production was diverted to war effort on account of World War II and at times as much as 95% of the total capacity was booked for the production of "Service Biscuit". In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" and made its first foray into the dairy products market. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognized for its innovative approach to products and marketing. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic Times pegged Britannia India's 2nd Most Trusted Brand.

Britannia has more than 15 per cent share in the biscuit market. In the organised biscuit market, the market share is over 35 per cent. The company claims a share of 33 per cent of the organized cheese market and 15 per cent of the milk powder. Company caters to all segments of the biscuit market. Its major brands include Marie, Arrowroot, Bourbon, Milk-bikis, Nice, Snax, Coconut Crunchies, Pure Magic, Snax, Cream Treat Good Day, Jim-Jam and Chekkers and Tiger. The brands Digestive, Thinlite and Cream Cracker have been launched under the umbrella brand Nutrichoice in last years. The company also launched a Cashew-Badam variant of Tiger. BIL has a small presence in the cake market with Merricake, FruitCake and Half-Half brands. Britannia Industries (BIL) is one of the largest bakery in the private sector and a household name in food products. In the biscuit's segment the tiger brand has captured 26 per cent share of glucose biscuit market. Earlier, with its previous glucose biscuit brands - Glucose D and Circus- Britannia had only 10 per cent of market share.

Company has decided to focus on seven core brands in the biscuits and bakery category. The brands included Good Day, Tiger, 50-50, Snax, and the Cream Treat brands, among others. Company is adopting its strategy aggressively into dairy products and organized biscuit market.

The company's success in garnering the trust of almost one-third of India's one billion populations and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. Company is having great and consistent record of dividend payout and Bonus announcement. At CMP stock is trading at very attractive valuation of 13.68 X multiple of its FY2013 Estimated earnings. We recommend investors "STRONG BUY" on "Britannia industries" with medium to long term investment prospective.