Shares of Britannia Industries rose to an intra-day high of Rs 582 following the company's announcement that it will commence buy-back from September 5. However, profit taking during the later part of trading session pulled down the stock to Rs 539.05, up 1.43 per cent from its previous close on the Bombay Stock Exchange (BSE).
A total of 11,797 shares of the biscuits major were traded on BSE and 43,927 shares on the NSE. Moments after the announcement of the buy-back date, the scrip surged to Rs 582. In the five sessions between August 27 and September 3, the scrip advanced 6.07 per cent to Rs 531.45 from Rs 501.
Britannia Industries has set a maximum buy-back price of Rs 650 per share of Rs 10, a premium of 19 per cent over the current traded price.
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The MNC affiliate expects to undertake the buy-back through the open market. The company has set an outlay of up to Rs 92 crore for the buy-back. The buy-back programme will open on BOLT on September 5. The last date for the buy-back is August 5, 2003.
Britannia is also being supported by reports that fast moving consumer goods (FMCG) sales grew for the second successive month in July 2002. Sales of FMCG rose by 0.5 per cent on a y-o-y basis and 0.2 per cent on a month-on-month basis. Growing sales of chocolates, biscuits and shampoo were the major propellants of FMCG sales.
Sales of biscuits continued their consistent growth with a 15.2 per cent growth in sales in July 2002. It is noteworthy that Britannia Industries is the country's largest biscuit maker maintaining its sales growth at 6 per cent.
For the first quarter ended June 30, Britannia Industries posted a 15.4 per cent rise in net profit to Rs 18.7 crore compared with Rs 16.2 crore in the corresponding period last year. However net sales declined by 6.5 per cent, to Rs 326.6 crore from Rs 349.4 crore in June quarter 2001.
Britannia is the market leader in the domestic biscuits industry with close to 60 per cent market share. It mainly caters to the premium segment. Biscuits are the revenue drivers for Britannia.
The company has also diversified into dairy and bakery products like butter, cheese and ghee. It is continuously expanding its product portfolio to achieve its vision of converting every third Indian into its consumer. However, the company has dropped its plans to enter the mineral water segment.
The company which has agreed in-principle to acquire a 49 per cent stake in Kwality Biscuits and Snacko Biscuits, has the option of hiking the holding in the two companies to 100 per cent.
The company is expected to complete the acquisition of the 49 per cent stake in Kwality Biscuits and Snacko Biscuits soon. In October 2001, Britannia had agreed in-principle to acquire a 49 per cent stake in Snacko Biscuits, a privately held company, along with the trademark `Nutrine' and several other trademarks in addition to their copyrights and designs.
Britannia 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.
As on June 30, the promoters' holding in Britannia was 45.5 per cent, while the public and institutions held 22 per cent and 30 per cent, respectively.