A Study on Risk-Return Analysis with special reference to

Britannia Industries Ltd.

Submitted by:

Kajal Sahoo | 2022BBAH07ASB217

Gagan Giri | 2022BBAH07ASB278
Aryan | 2021BBAH07ASB240
Nadipineni Diwakar | 2022BBAU07ASB246

Course: Foundation of Finance (MGT 1164)

Stream: B.B.A. (Bachelor of Business Administration)

Batch 2022-2025

Course Supervisor:

Dr. Momina Bushra

ALLIANCE SCHOOL OF BUSINESS

ALLIANCE UNIVERSITY, BANGALORE

 CHAPTER – 1
INTRODUCTION

Britannia Industries Limited is an Indian food and beverage company based in Bangalore,
India. The company was founded in 1892 and is one of the oldest and most respected FMCG
(Fast-Moving Consumer Goods) companies in India. Britannia is known for its range of
biscuits, cakes, and bread, as well as its dairy products, including cheese, milk, and butter.

Over the years, Britannia has expanded its product portfolio and is now a leading player in
the Indian food industry. Some of the company's popular brands include Good Day, Tiger,
NutriChoice, Milk Bikis, and Marie Gold biscuits. Britannia also has a joint venture with
Fonterra, the world's largest dairy exporter, to market and distribute dairy products in India.

Britannia has a strong distribution network across India and its products are available in more
than 5 million retail outlets across the country. The company has also expanded its presence
in international markets, with exports to more than 70 countries.

In recent years, Britannia has focused on innovation and product development, launching new
products such as croissants, rolls, and cakes to cater to changing consumer preferences. The
company has also made significant investments in technology and digitalization to improve
its operations and enhance its customer engagement.

Formerly Britannia Biscuit Company Limited

Type Public

Traded as BSE: 500825
NSE: BRITANNIA
NSE NIFTY 50 Constituent

ISIN INE216A01030

Industry Food processing

 Founded 1892; 131 years ago in Calcutta
1918; 105 years ago as Britannia Biscuit Company Limited

Headquarters Whitefield, Bangalore, Karnataka
, 
India[1][2]

Area served Worldwide

Key people   NusliWadia (Chairman)

 Varun Berry (Executive Vice-Chairman & MD)
 RajneetKohli (CEO)
 N Venkataraman (Executive Director & CFO)

Products   Bakery

products including biscuits, bread, cakes and rusk
 Dairy
products including milk, butter, cheese, ghee and dahi

Revenue  ₹11,878.95 crore (US$1.5 billion) (2020)

Operating  ₹1,860.87 crore (US$230 million) (2020)

income

Net income  ₹1,402.63 crore (US$180 million) (2020)

Total assets  ₹7,253.34 crore (US$910 million) (2020)

Number of 4,480 (as on 31 March 2019)

employees

Parent Wadia Group

Subsidiaries   Manna Foods Private Limited

 International Bakery Products Limited

Website www.britannia.co.in
The financial statements of Adani Enterprises Limited include the following:
 BALANCE SHEET
The Balance Sheet shows a company's assets, liabilities, and equity at a specific point in time,
usually at the end of a quarter or fiscal year. It provides a snapshot of the company's financial
position and shows how its assets are funded, either through debt or equity.

The balance sheet is a crucial financial statement that provides a snapshot of a company’s
financial health at a specific point in time.
Some of the key points highlighting the importance of the balance sheet are:

 It shows a company's assets, Liabilities, and equity: The balance sheet provides a
summary of a company’s financial position by listing all its assets, liabilities, and
equity at a given point in time. This information can help investors, creditors, and
other stakeholders understand the company’s financial health.

 It helps in assessing liquidity and solvency: By analysing a company’s balance sheet,

stakeholders can determine its ability to meet short-term and long-term financial
obligations. The balance sheet highlights the company’s liquidity and solvency
position, which is crucial information for investors, lenders, and creditors.

 It provides insights into a company’s capital structure: The balance sheet details a
company’s debt-to-equity ratio, which indicates how much debt a company has
relative to its equity. This ratio provides insights into a company’s capital structure
and helps stakeholders assess its financial risk.

 It helps in making investment decisions: Investors can use the balance sheet to assess
a company’s financial stability and performance before making investment decisions.
The balance sheet provides valuable insights into a company’s assets, liabilities, and
equity, which can help investors determine whether the company is a good investment
opportunity.

 It is used for benchmarking and comparison: The balance sheet can be used to
benchmark a company’s financial performance against its competitors or industry
standards. It allows stakeholders to compare and contrast different companies’
financial positions, which can help them make better investment and strategic
decisions.
  In summary, the balance sheet is an essential financial statement that provides
valuable information about a company’s financial position, capital structure, liquidity,
and solvency. It is an important tool for making investment decisions, assessing
financial risk, and benchmarking performance against industry standards.

BRITANNIA Balance Sheet as on March 2022

BALANCE SHEET OF MAR 22 MAR 21 MAR 20  

BRITANNIA
INDUSTRIES (in Rs. Cr.)

  12 months 12 months 12 months  

EQUITIES AND  
LIABILITIES

SHAREHOLDER'S  
FUNDS

Equity Share Capital 24.09 24.09 24.05  

TOTAL SHARE 24.09 24.09 24.05  

CAPITAL

Reserves and Surplus 2,378.45 3,267.34 4,216.19  

TOTAL RESERVES AND 2,378.45 3,267.34 4,216.19  

SURPLUS

TOTAL 2,402.54 3,319.53 4,274.65  

SHAREHOLDERS
FUNDS

NON-CURRENT  
LIABILITIES

Long Term Borrowings 698.52 721.55 722.13  

Deferred Tax Liabilities 0.00 7.85 10.97  

[Net]
Other Long Term Liabilities 52.42 39.32 30.53  

Long Term Provisions 0.00 0.00 0.00  

TOTAL NON-CURRENT 750.94 768.72 763.63  

LIABILITIES

CURRENT LIABILITIES  

Short Term Borrowings 1,479.62 1,075.70 479.99  

Trade Payables 1,156.62 1,191.09 955.98  

Other Current Liabilities 762.07 695.34 596.39  

Short Term Provisions 451.16 365.63 182.70  

TOTAL CURRENT 3,849.47 3,327.76 2,215.06  

LIABILITIES

TOTAL CAPITAL AND 7,002.95 7,416.01 7,253.34  

LIABILITIES

ASSETS  

NON-CURRENT ASSETS  

Tangible Assets 1,327.41 1,360.02 1,416.02  

Intangible Assets 15.60 8.54 8.37  

Capital Work-In-Progress 535.27 111.66 38.92  

Other Assets 34.42 35.28 36.14  

FIXED ASSETS 1,912.70 1,515.50 1,499.45  

Non-Current Investments 1,221.61 1,657.16 2,259.11  

Deferred Tax Assets [Net] 40.58 0.00 0.00  

Long Term Loans And 100.00 70.73 192.03  

Advances

Other Non-Current Assets 135.00 157.69 97.60  

TOTAL NON-CURRENT 3,409.89 3,401.08 4,048.19  

ASSETS

CURRENT ASSETS  

Current Investments 802.50 1,292.96 882.06  

Inventories 1,251.64 991.28 633.53  

Trade Receivables 253.85 198.36 242.23  

Cash And Cash Equivalents 52.29 110.80 39.16  

Short Term Loans And 698.00 946.09 1,075.73  

Advances

Other Current Assets 534.78 475.44 332.44  

TOTAL CURRENT 3,593.06 4,014.93 3,205.15  

ASSETS

TOTAL ASSETS 7,002.95 7,416.01 7,253.34  

OTHER ADDITIONAL  
INFORMATION

CONTINGENT  
LIABILITIES,
COMMITMENTS

Contingent Liabilities 589.41 547.05 241.37  

CIF VALUE OF  
IMPORTS

Raw Materials 0.00 0.00 0.00  

Stores, Spares And Loose 0.00 0.00 0.00  

Tools
Trade/Other Goods 0.00 0.00 0.00  

Capital Goods 0.00 0.00 0.00  

EXPENDITURE IN  
FOREIGN EXCHANGE

Expenditure In Foreign 919.47 1,510.19 293.26  

Currency

REMITTANCES IN  
FOREIGN CURRENCIES
FOR DIVIDENDS

Dividend Remittance In -- -- --  
Foreign Currency

EARNINGS IN FOREIGN  
EXCHANGE

FOB Value Of Goods -- -- --  

Other Earnings 289.01 305.85 281.02  

BONUS DETAILS  

Bonus Equity Share Capital 21.94 21.94 21.94  

NON-CURRENT  
INVESTMENTS

Non-Current Investments -- -- --  
Quoted Market Value

Non-Current Investments 1,221.61 1,657.16 2,259.11  

Unquoted Book Value

CURRENT  
INVESTMENTS

Current Investments Quoted -- -- --  

Market Value
Current Investments 802.50 1,292.96 882.06  
Unquoted Book Value

BRITANNIA BALANCE SHEET ANALYSIS

 The company’s current liabilities during FY22 stood at Rs 42 billion as compared to

Rs 36 billion in FY21, thereby witnessing an increase of 15.2%.

 Long-term debt down at Rs 7 billion as compared to Rs 7 billion during FY21, a fall

of 5.4%.

 Current assets fell 10% and stood at Rs 40 billion, while fixed assets fell 2% and
stood at Rs 35 billion in FY22.

 Overall, the total assets and liabilities for FY22 stood at Rs 75 billion as against Rs 80
billion during FY21, thereby witnessing a fall of 7%.
  CASH FLOW:
The Cash Flow Statement shows how much cash is coming into and going out of a company
over a specific period of time. It is divided into three sections: operating activities, investing
activities, and financing activities. The statement provides insight into a company's ability to
generate cash and pay its bills.

Here are some key points highlighting the importance of the cash flow statement:

 Provides a detailed view of a company’s cash position, including its sources and uses
of cash.
 Helps to identify potential cash shortfalls or surpluses in the near term.
 Helps to evaluate a company’s ability to meet its financial obligations, including debt
payments and operating expenses.
 Helps to assess the company’s ability to invest in new opportunities or to pay
dividends to shareholders.
 Provides a way to analyze the company’s performance over time and compare it to its
competitors.
 Helps to identify trends in cash flow that can impact the company’s long-term
financial stability.
 Provides valuable information for potential investors, lenders, and creditors in making
decisions about investing or lending money to the company.
Overall, the cash flow statement is an important tool for financial management that helps
companies make informed decisions about their financial resources and plan for the future.

HOW TO ANALYSE CASH FLOW STATEMENT

 Analysing a cash flow statement involves looking at the cash inflows and outflows of
a company over a specific period of time. Here are some steps to follow when
analysing a cash flow statement:

 Understand the basics: The cash flow statement shows the cash inflows and outflows
from operating, investing, and financing activities. Operating activities include the
company’s day-to-day operations, such as sales and expenses. Investing activities
include the purchase and sale of assets such as property, plant, and equipment.
Financing activities include raising and repaying debt, issuing and repurchasing stock,
and paying dividends.

 Look at the net cash flow: The first line of the cash flow statement shows the net cash
flow for the period. This is the total amount of cash that the company has generated or
used during the period. If the net cash flow is positive, it means the company
generated more cash than it used, which is generally a good sign.

 Analyse the operating activities section: The operating activities section shows the
cash inflows and outflows from the company’s core business operations. Look at the
net cash flow from operating activities and compare it to the company’s net income. If
the net cash flow is higher than net income, it suggests that the company is generating
more cash than it’s accounting for on its income statement, which could be a good
sign.

 Look at the investing activities section: The investing activities section shows the cash
inflows and outflows from the company’s investments in property, plant, and
equipment, as well as other long-term assets. If the company is investing heavily in its
operations, it could be a good sign for future growth. However, if the company is
selling off assets, it could be a warning sign that the company is struggling.

 Analyse the financing activities section: The financing activities section shows the
cash inflows and outflows from the company’s financing activities, such as debt and
equity issuances and repayments. Look for any large debt repayments or equity
issuances, as these could have a significant impact on the company’s financial
position.

 Look for trends: Finally, look for trends in the cash flow statement over time. Has the
company’s cash flow been increasing or decreasing over the past few periods? Are
there any patterns or anomalies that stand out? Trends in the cash flow statement can
provide valuable insights into a company’s financial health and potential for growth.
BRITANNIA CASH FLOW STATEMENT ANALYSIS
 BRITANNIA’s cash flow from operating activities (CFO) during FY22 stood at Rs 13
billion on a YoY basis.
 Cash flow from investing activities (CFI) during FY22 stood at Rs 9 billion, an
improvement of 109.1% on a YoY basis.
 Cash flow from financial activities (CFF) during FY22 stood at Rs -22 billion on a
YoY basis.
 Overall, net cash flows for the company during FY22 stood at Rs -321 million from
the Rs 662 million net cash flows seen during FY21.

BRITANNIA CASH FLOW STATEMENT 2020-22

CASH FLOW OF MAR 22 MAR 21 MAR 20

BRITANNIA
INDUSTRIES (in Rs. Cr.)

  12 months 12 months 12 months

NET PROFIT/LOSS 2,145.12 2,379.44 1,908.26

BEFORE
EXTRAORDINARY ITEMS
AND TAX

Net Cash Flow From Operating 1,206.09 1,778.27 1,659.68

Activities

Net Cash Used In Investing 930.63 500.64 -1,568.34

Activities

Net Cash Used From Financing -2,211.71 -2,222.84 -94.25

Activities

Foreign Exchange Gains / 0.00 0.00 0.00

Losses

Adjustments On Amalgamation 0.00 0.00 0.00

Merger Demerger Others
 NET INC/DEC IN CASH -74.99 56.07 -2.91
AND CASH EQUIVALENTS

Cash And Cash Equivalents 76.29 20.22 23.13

Begin of Year

Cash And Cash Equivalents End 1.30 76.29 20.22

Of Year

 INCOME STATEMENT :
Also known as the Profit and Loss Statement or Statement of Operations, the Income
Statement shows a company's revenues and expenses over a specific period of time, such as a
month, quarter, or year. The statement calculates the net income or loss of the company
during the period, which is an important indicator of profitability.

The importance of the income statement can be highlighted in the following points:

 Provides an overview of a company’s financial performance: The income statement

provides a summary of a company’s revenues, expenses, and net income for a specific
period. This information is crucial in evaluating a company’s financial performance
and determining its profitability.
  Helps in decision-making: The income statement is an important tool for decision-
making. It can help management make informed decisions regarding operations,
investments, and financing.

 Assists in forecasting future performance: Historical data from the income statement
can be used to forecast future performance. By analyzing trends in revenue, expenses,
and net income, management can make projections about future financial
performance.

 Facilitates comparison with industry benchmarks: The income statement enables

comparison of a company’s financial performance with industry benchmarks. This
comparison can help management identify areas for improvement and make necessary
adjustments.

 Provides information to stakeholders: The income statement is an important source of

information for stakeholders such as investors, creditors, and regulatory agencies. It
helps them evaluate a company’s financial health and make decisions about investing
or lending.

Overall, the income statement is a vital financial statement that provides valuable information
about a company’s financial performance. Its importance lies in its ability to provide insights
into a company’s profitability, assist in decision-making, facilitate forecasting, enable
comparison with industry benchmarks, and provide information to stakeholders.

BRITANNIA Income Statement 2020-22

Standalone Profit & Loss

------------------- in Rs. Cr. -------------------
account
  Mar 22 Mar 21 Mar 20
12
  12 months 12 months
months
INCOME
Revenue From Operations
13,169.04 12,113.65 10,820.57
[Gross]
Less: Excise/Service Tax/Other
0.00 0.00 0.00
Levies
Revenue From Operations
13,169.04 12,113.65 10,820.57
[Net]
Other Operating Revenues 202.58 265.18 166.11
Total Operating Revenues 13,371.62 12,378.83 10,986.68
Other Income 359.43 292.70 335.43
Total Revenue 13,731.05 12,671.53 11,322.11
EXPENSES
Cost Of Materials Consumed 6,366.31 5,509.69 5,052.67
Purchase Of Stock-In Trade 2,183.41 1,908.50 1,543.55
Changes In Inventories Of
-73.96 -43.22 61.51
FG,WIP And Stock-In Trade
Employee Benefit Expenses 413.56 402.85 368.87
Finance Costs 133.46 97.81 65.17
Depreciation And Amortisation
170.01 166.77 151.69
Expenses
Other Expenses 2,393.14 2,249.69 2,189.39
Total Expenses 11,585.93 10,292.09 9,432.85
  Mar 22 Mar 21 Mar 20
12
  12 months 12 months
months
Profit/Loss Before
Exceptional, Extraordinary 2,145.12 2,379.44 1,889.26
Items And Tax
Exceptional Items 0.00 0.00 19.00
Profit/Loss Before Tax 2,145.12 2,379.44 1,908.26
Tax Expenses-Continued Operations
Current Tax 590.36 622.53 416.86
Deferred Tax -48.43 -3.12 7.10
Total Tax Expenses 541.93 619.41 423.96
Profit/Loss After Tax And
1,603.19 1,760.03 1,484.30
Before Extraordinary Items
Profit/Loss From Continuing
1,603.19 1,760.03 1,484.30
Operations
Profit/Loss For The Period 1,603.19 1,760.03 1,484.30
  Mar 22 Mar 21 Mar 20
12
  12 months 12 months
months
OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 66.56 73.12 61.75
Diluted EPS (Rs.) 66.56 73.09 61.73
VALUE OF IMPORTED AND
INDIGENIOUS RAW MATERIALS
STORES, SPARES AND LOOSE
TOOLS
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 1,794.47 2,839.66 422.27
Tax On Dividend 0.00 0.00 0.00
Equity Dividend Rate (%) 5,650.00 15,750.00 3,500.00

BRITANNIA INCOME STATEMENT AANALYSIS

 Operating income during the year rose 7.6% on a year-on-year (YoY) basis.
• The company’s operating profit decreased by 12.3% YoY during the fiscal.
Operating profit margins witnessed a fall and stood at 15.6% in FY22 as
against 19.1% in FY21.
• Depreciation charges increased by 1.4% and finance costs increased by 30.1%
YoY, respectively.
• Other income declined by 28.8% YoY
• Net profit for the year declined by 18.0% YoY.
• Net profit margins during the year declined from 14.1% in FY21 to 10.7% in
FY22.
 CHAPTER 2
OVERVIEW OF FINANCIAL DIVISIONS & ROLES
INVOLVED

Britannia Industries Limited is an Indian food and beverage company that produces a range
of products such as biscuits, bread, cakes, and dairy products. The organization structure of
Britannia is divided into various departments that work together to achieve the company’s
goals. Here is a brief overview of the organization structure of Britannia:

 Board of Directors: The Board of Directors is responsible for the overall management
and governance of the company. It consists of a Chairman, Managing Director, and
other directors who are experts in their respective fields.

 Corporate Management Team: The Corporate Management Team comprises of the

senior executives who report to the Board of Directors. They are responsible for the
overall strategy, planning, and execution of the company’s operations.

 Business Divisions: Britannia has various business divisions, including Biscuits,

Bread, Cakes, and Dairy. Each division has a separate management team responsible
for the operations and profitability of that division.

 Sales and Marketing: The Sales and Marketing department is responsible for creating
and implementing marketing strategies to promote Britannia’s products and increase
sales. They work closely with the Business Divisions to identify market opportunities
and develop new products.

 Research and Development: The Research and Development department is

responsible for developing new products, improving existing products, and ensuring
that all products meet the company’s quality standards.

 Human Resources: The Human Resources department is responsible for managing the
company’s workforce, including recruitment, training, and development of
employees.
  Finance and Accounts: The Finance and Accounts department is responsible for
managing the company’s finances, including financial planning, accounting, and
reporting.

Overall, Britannia’s organization structure is designed to facilitate efficient and effective

management of the company’s operations, promote innovation and new product
development, and ensure the quality of its products.
 CHAPTER – 3 & 4
MEASUREMENT & ANALYZATION OF RISK-RETURN OF
STOCK

Closing
Value Holding Market
Month, Closin (NIFTY50 Period Return (Ri * (Ri - Avg. (Ri - Avg.
Year g Price ) Return (Ri) (Rm) (Rm)^2 Rm) R) R)^2
March, 3625.0
2021 5 14690.7 NIL NIL NIL NIL NIL NIL
- - -
April, 4.85648473 0.40569884 0.16459 1.970270 3.9567716 15.6560416
2021 3449 14631.1 8 3 2 2 1 1
-
3447.8 0.03334299 6.50463738 42.3103 - 0.8663701 0.75059719
May, 2021 5 15582.8 8 2 1 0.216884 3 5
3649.6 5.85292283 0.89008393 0.79224 5.209592 6.7526359
June, 2021 5 15721.5 6 9 9 6 6 45.5980924
- -
6.19922458 0.26428775 0.06984 - 5.2995114 28.0848217
July, 2021 3423.4 15763.05 3 9 8 1.638379 6 1
August, 8.68581905 75.4434 145.6601 312.214446
2021 3997.5 17132.2 16.7698779 2 5 2 17.669591 9
- -
September 3948.9 1.21450906 2.83647167 8.04557 - 0.3147959 0.09909648
, 2021 5 17618.15 8 3 2 3.444921 4 7
- -
October, 3675.7 6.91829473 0.30366411 0.09221 - 6.0185816 36.2233246
2021 5 17671.65 7 9 2 2.100838 1 3
- -
November 3.54349452 3.89578788 15.1771 13.80470 - 6.98958009
, 2021 3545.5 16983.2 5 6 6 3 2.6437814 7
December, 2.18362852 4.76823 3.726118 6.79176504
2021 3606 17354.05 1.70638838 7 4 3 2.6061015 6

January, 3535.3 17339.85 - - 0.00669 0.160428 - 1.12552591

 1.96062118 1.0609080
2022 7 0.08182528 5 4 6 9
- - -
February, 3427.4 3.05066048 3.14852781 9.91322 9.605089 2.1509473 4.62657453
2022 5 16793.9 1 3 7 4 6 6
- -
March, 6.44940115 3.99460518 15.9568 - 5.5496880 30.7990372
2022 3206.4 17464.75 8 4 7 25.76281 3 8

Σ Closing Price = 46537.8

Σ Closing Value (NIFTY50) = 214746.9
Σ Ri = -9.896844361
Σ Rm = 18.13135781
Σ (Rm)^2 = 172.7404
Σ (Ri * Rm) = 146.97249
Σ (Ri - Avg. R)^2 = 488.9589038

Average Rate of Return = -0.899713124

Average Rate of Return (NIFTY50) = 1.648305256
Standard Deviation = Square Root of (Σ (Ri - Avg. R)^2/11) = 1.143020465

For calculating Beta Coefficient, we’ve used this equation, via Excel –

Beta Coefficient = 1.143020465

COMPANY BETA ANALYSIS

 The beta coefficient of a company is a measure of its systematic risk or volatility in

relation to the overall market. A beta of 1 indicates that the company’s volatility is
 equal to that of the market, while a beta greater than 1 indicates higher volatility and a
beta less than 1 indicates lower volatility.

 In the case of a beta coefficient of 1.143020465, this suggests that the company is
slightly more volatile than the overall market. Investors who are comfortable with
higher levels of risk may view this as an opportunity for potentially higher returns,
while those who are more risk-averse may prefer to invest in companies with lower
betas.

However, it’s important to note that beta is just one factor to consider when making
investment decisions, and should not be the sole determining factor. Investors should also
consider other factors such as the company’s financial health, industry trends, management
team, and overall market conditions before making any investment decisions.