Britannia rises nearly 3% on announcement of bonus debentures

Britannia has given multi-bagger returns in the last five years. On October 07, 2013, the stock had stood at Rs 851.85 It has now zoomed to Rs 5,595, as of Monday's close.

Shares of Britannia rose nearly 3 per cent to Rs 5,690 in the early trade on Tuesday after the company's board announced it will give one free debenture worth Rs 30 in face value for one fully paid-up equity share. The company stated that “the company has completed 100 years of operations and is keen to reward its members for their continued support and belief”.

It said it will utilise its accumulated profits of Rs 8.69 billion for the debenture issue. However, the record date has not been fixed yet.

Britannia Industries is one of India’s leading food companies and enjoys and market share of nearly 33 per cent in the Indian biscuit industry. "The company’s focus on fast-growing premium and super premium biscuit categories, product innovations (in non-biscuit category), increasing direct reach, and improving in-house manufacturing, will aid improvement in operating margins and market share gain going forward, said IIFL in a report. 

"Thus, we estimate Britannia to report revenue CAGR of 13% with EBITDA margin expansion of nearly 300bps over FY18-21E (18.2% in FY21E). PAT is estimated to grow at 20% CAGR over the same period," IIFL added. 

Britannia has given multi-bagger returns in the last five years. On October 07, 2013, the stock had stood at Rs 851.85. But that was then. It has now zoomed to Rs 5,595, as of Monday's close (October 08) -- a jaw-dropping 556.80 per cent jump.

The FMCG major had reported a 19.41 per cent rise in consolidated net profit at Rs 2.58 billion for the quarter ended June 30, 2018, driven by double-digit volume growth. The company had posted a net profit of Rs 2.16 billion in the April-June period a year ago. Its total income stood at Rs 25.85 billion in the quarter under review. It was Rs 23.75 billion in the corresponding period of the previous financial year, Britannia Industries said in a BSE filing.

At 10:11 am, the stock was trading half a per cent higher at Rs 5,567.20 on BSE.