Key highlights from Britannia Industries Limited (BRITANNIA) Q4 FY23 Earnings Concall
- [00:21:04] Chirag Shah from CLSA asked what caused the sharp increase in other operating income in the last two quarters. Varun Berry MD replied that it’s due to the money from PLI for ’21-’22 being realized in the current year.
- [00:23:14] Chirag Shah of CLSA enquired, how does the company’s pricing actions compare to key competitors in the current competitive intensity. Varun Berry MD answered that a period of uncertain inflation was addressed by the company with price increases. The competition has increased slightly, but not significantly. The company predicts that inflation will moderate and not be as high as the past two years.
- [00:25:02] Chirag Shah of CLSA asked about the movement of the share of LUPs in the last couple of years and how it is expected to change going forward. Varun Berry MD replied that volume growth is high, but revenue growth is not. However, the number of packs sold is still up 12%, with no significant change in LUPs vs family packs. The company has reduced waste in LUPs and lowered grammage resulting in the number of packs sold still growing well, even though volume has not increased.
- [00:26:41] Vivek Maheshwari from Jefferies enquired where is the GM expected to settle in the coming quarters given the mismatch between end consumer pricing and spot input prices. Varun Berry MD clarified that it will hover around the same, about a percent plus minus.
- [00:30:17] Arnab Mitra from Goldman Sachs asked will volume growth start to pick up as pricing anniversarizes and grammage increases, or will there be a lag between the two. Varun Berry MD answered that the company believes that volume growth will pick up and is not worried about the number of packs sold. BRITANNIA wants to see aggressive growth in the number of packs sold.
- [00:31:59] Richard Liu from JM Financial enquired why is the COGS figure in rupees crore the same in both stand-alone and consolidated figures despite the difference in revenue. N. Venkataraman CFO replied that the growth difference between stand-alone and consolidated figures is due to dairy and JV arrangements. These factors impact growth rate by almost 1.7%.
- [00:33:53] Latika Chopra at J.P. Morgan asked about the revenues for the non-biscuit portfolio for the FY23 and information about the main categories within the segment. Varun Berry MD replied that the non-biscuit portfolio’s biggest categories are cake, rusk, dairy, and bread, each about INR 600-700 crores. The international category is around INR 700-800 crores, while emerging categories like croissant are around INR 100 crores.
- [00:38:18] Sheela Rathi from Morgan Stanley queried what has changed in the company’s distribution strategy that is driving market share gains at the time of taking price hikes. Varun Berry MD clarified that the combination of a solid brand, efficient distribution, and high-quality products produced by new factories and lines contribute to the company’s success. Distribution is the number one factor, followed by brand strength.
- [00:40:39] Sheela Rathi from Morgan Stanley enquired if the continued milk inflation throughout the year will lead to a recalibration of the company’s dairy strategy. Varun Berry MD said the company absorbed milk inflation instead of recalibrating its dairy strategy, resulting in profit loss. BRITANNIA has a strong brand in Winkin Cow and remain focused on establishing a solid brand portfolio in dairy despite the hit to profitability.
- [00:42:15] Avi Mehta from Macquarie asked why was pricing action not needed despite increased competition and what caused the moderation of market share gain in rural areas and the reduction of the gap between rural and urban market share. Varun Berry MD answered that the company sees no significant change in competitive intensity and is taking stringent action in categories with heavy competition from local players. BRITANNIA is now looking at competition regionally and have built barriers to entry for smaller players in some new products.
- [00:46:50] Percy Panthaki with IIFL asked about the company’s current optimum level of direct distribution and at what point does it no longer make sense to go directly. Varun Berry MD said the company has strong distribution with 90.7% weighted distribution and joint number one ranking, but faces a significant gap in the hilly belt where the number two player has a lead. The company aims to increase its share and distribution in this area and can easily add 5-6 lakh outlets.
- [00:50:06] Percy Panthaki of IIFL asked about the CAGR for the biscuit and non-biscuit portfolios over the last five years and what are the company’s targets for the percentage of share coming from non-biscuits in five years. Varun Berry MD said the company has grown 1.5 times in the non-biscuit portfolio and plans to expand even more in the next five years, leveraging its distribution strength to introduce new brands beyond biscuits, such as croissant, wafers, and drinks.
Cochin Shipyard Limited (NSE:COCHINSHIP) Q4 FY22 Earnings Concall dated May. 26, 2022 Corporate Participants: Madhu S Nair -- Chairman & Managing Director Jose V J -- Director Finance Analysts: Vastupal Shah
Can you guess the name of the company that was listed during the IPO frenzy in 2020 and is the second largest player in the Indian municipal waste management industry?
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