PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

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1 BUY CMP Target Price BRITANNIA INDUSTRIES LTD Result Update: Q2 FY14 DECEMBER 16 th 2013 ISIN: INE216A01022 Index Details Stock Data Sector FMCG (Food) BSE Code Face Value wk. High / Low (Rs.) / Volume (2wk. Avg.) Market Cap (Rs. in mn.) Annual Estimated Results (A*: Actual / E*: Estimated) YEARS FY13A FY14E FY15E Net Sales EBITDA Net Profit EPS P/E Shareholding Pattern (%) SYNOPSIS Britannia Industries Limited engages in the production and sale of bakery and dairy products in India and internationally. During the quarter, Consolidated Revenue growth of 13% with 66% growth in Net Profit of the company. Britannia Industries Ltd has posted a net profit of Rs mn for the quarter ended Sep 30, 2013 as compared to Rs mn for the quarter ended Sep 30, Revenue for the quarter rose 13.65% to Rs million from Rs million, when compared with the prior year period. Profit before interest, depreciation and tax is Rs millions as against Rs millions in the corresponding period of the previous year. 1 Year Comparative Graph For six months ended 30 th Sep, 2013, the Company s net sales raised by 14.40% to Rs mn from Rs mn in H1 FY13. BRITANNIA INDUSTRIES LTD BSE SENSEX Britannia has got 600,000 outlets across India and is expanding its distribution network in rural areas. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 30% over 2012 to 2015E respectively. PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Britannia Industries Ltd Nestle India Ltd Jubilant Foodworks Ltd GlaxoSmithKline Consumer Healthcare

2 Recommendation & Analysis - BUY Britannia Industries Ltd (BIL), India s leading Food Company, reported consolidated revenue growth of 12.8% in Q2 and 13.5% for the six months at Rs. 17, mn & Rs. 32,801.0 mn respectively. Standalone revenue for Q2 at Rs mn and for the six months at Rs. 29, mn increased 13.7% and 14.2% respectively. Net Profit for Q2 increased 65.7% and for the six months increased 77.6%, on a consolidated basis, at Rs mn & mn respectively. Standalone net profit for Q2 at Rs mn and for the six months at Rs mn increased 109.8% and 104.3% respectively. Britannia s focus continues to be on profitable growth, driven through innovation and operational excellence right through the value chain. Revenue and cost management form an intrinsic part of operational excellence and will continue to be monitored closely for improvement. The role of innovation of the Company is about creating new sources of value. These include completely new or renovated products and packs that create greater consumer delight or the application of new technology that reduces cost and increases quality delivery, or a process innovation that reduces time to completion and increases efficiency. This comprehensive view of innovation enables company to experiment and pilot new initiatives and scales those that are successful. Consequently, and in line with its strategy, the Company has invested in creating new capacity, both through its own Greenfield units and through expansion with its existing partners. Over FY E, we expect the company to post a CAGR of 13% and 30% in its top-line and bottom-line respectively. The stock has re-rated substantially in last two years and we believe that it can further increase. Hence, we recommend BUY for BRITANNIA INDUSTRIES LTD with a target price of Rs on the stock.

3 QUARTERLY HIGHLIGHTS (STANDALONE) Results updates- Q2 FY14, Months Sep-13 Sep-12 % Change Net Sales PAT EPS EBITDA The company s net profit jumps to Rs million against Rs million in the corresponding quarter ending of previous year, an increase of %. Revenue for the quarter rose 13.65% to Rs million from Rs million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.98 a share during the quarter, registering % increase over previous year period. Profit before interest, depreciation and tax is Rs millions as against Rs millions in the corresponding period of the previous year. Break up of Expenditure Break up of Expenditure Rs. Million Q2 FY14 Q2 FY13 Cost of Material Consumed Purchase of Stock in Trade Employee Benefit Expenses Depreciation & Amortization Expense Conversion & Other related Charges Advertisement & Sales Promotion Other Expenditure

4 COMPANY PROFILE Britannia Industries Ltd is Indian company based in Industries Limited is an Indian company based in Kolkata that is famous for its Britannia and Tiger brands of biscuit, which are popular throughout the country. Britannia has an estimated 38% market share. The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. In 1892, Britannia started in a nondescript house in Kolkata with an initial investment of Rs 295. By 1910, with the advent of electricity, mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the affinity consumers had with 'Brand Britannia'. Britannia strode into the 21 st Century as one of India's biggest brands and the pre-eminent food brand of the country. 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. The brand Britannia is the trust of almost one-third of India's one billion populations and a strong management at the helm on its path of innovation and quality. Britannia is the leading biscuit manufacturer in the Rs. 124 billion Indian bakery market. Its primary business is bakery consisting of biscuits, bread and cakes. The company operates in the dairy segment through its subsidiary Britannia Dairy. The dairy segment comprising of milk, butter, cheese, ghee and curds accounts for 4.7% of Britannia's group turnover. Products Overview The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Britannia NutriChoice Oat Cookies Britannia NutriChoice Ragi Cookies Britannia Veg Cakes Nutrichoice Health Starter Kit Britannia NutriChoice 5 Grain Tiger Banana NutriChoice Sugar Out: Litetime, Chocolate cream, and Orange cream NutriChoice Digestive Biscuit Treat Fruit Rollz: Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates New Britannia Milk Bikis

5 Global Presence In March 2007, Britannia Industries Limited formed a Joint Venture with the Khimji Ramdas Group, one of the largest and the most respected business conglomerates in the Middle East. Britannia and its Associates have acquired a significant stake in Dubai based Strategic Food International Co. LLC and Oman based Al Sallan Food Industries Co SAOG. The two companies are key regional players in the biscuits, wafers and cookies segment in the GCC markets and export their products across the world. Strategic Food International Co. LLC (SFIC) is one of the largest biscuit and wafer manufacturing companies in the Middle East. An ISO and HACCP certified company. SFIC is also a proud winner of the Dubai Quality Appreciation Certificate. It offers a wide spectrum of products under the brand Nutro, which is a leading biscuit brand in the Middle East. Al Sallan Food Industries Co is one of the foremost companies for the production of cookies, rolls and chocolates. The products are well known under the brand name of Baker's Pride. Brands Category Dairy products Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy products from its associate. The products in this segment include Butter, Milk, Dahi, Diary Whitener, Ghee, Actimind, Tigerzor Choco Milk, Tigerzor Badam Milk, Cheese and Gourmet. Biscuits The brand names of biscuits include Time pass, Bourbon, Cookies, VitaMarieGold, Tiger, Nutrichoice Junior, Good day, 50-50, Treat, Pure Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice, Little Hearts, Marie Gold and many more. Subsidiary companies Al Sallan Food Industries Co. SAOC Boribunder Finance and Investments Private Limited Britannia and Associates (Dubai) Private Company Limited, Dubai Britannia and Associates (Mauritius) Private Limited, Mauritius Britannia Dairy Holdings Private Limited, Mauritius Britannia Dairy Private Limited Britannia Lanka Private Limited, Sri Lanka [Refer note (iv) below] Daily Bread Gourmet Foods (India) Private Limited Flora Investments Company Private Limited Ganges Vally Foods Private Limited

6 Gilt Edge Finance and Investments Private Limited International Bakery Products Limited J B Mangharam Foods Private Limited Manna Foods Private Limited Strategic Brands Holding Company Limited, Dubai Strategic Food International Co. LLC, Dubai Sunrise Biscuit Company Private Limited

7 FINANCIAL HIGHLIGHT (STANDALONE) Balance sheet as at March31, 2012 to 2015E (A*- Actual, E* -Estimations & Rs. In Millions) NEULAND LABORATORIES LTD. FY12A FY13A FY14E FY15E SOURCES OF FUNDS (Rs.in.mn) Shareholder's Funds Share Capital Reserves and Surplus Sub Total - Net worth Share application money pending allotment Capital subsidy Non Current Liabilities Long Term Borrowings Deferred Tax Liabilities Other Long term Liabilities Long Term Provisions Sub Total - Non Current Liabilities Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions Sub Total - Current Liabilities Total Liabilities ( ) APPLICATION OF FUNDS Non-Current Assets Fixed Assets Tangible assets Intangible assets Capital Work in Progress a) Sub Total - Fixed Assets b) Non-current investments c) Long Term Loans and Advances d) Other Non-current Assets Sub Total Non Current Assets Current Assets Current Investment Inventories Trade receivables Cash and Bank Balances Short-terms loans & advances Sub Total - Current Assets Total Assets (1+2)

8 Annual Profit & Loss Statement for the period of 2012to 2015E Value(Rs.in.mn) FY12A FY13A FY14E FY15E Description 12m 12m 12m 12m Net Sales Other Income Total Income Expenditure Operating Profit Interest Gross profit Depreciation Profit Before Tax Tax Net Profit Equity capital Reserves Face value EPS Quarterly Profit & Loss Statement for the period of 31 st Mar, 2013 to 31 st Dec, 2013E Value(Rs.in.mn) 31-Mar Jun Sep Dec-13E Description 3m 3m 3m 3m Net sales Other income Total Income Expenditure Operating profit Interest Gross profit Depreciation Profit Before Tax Tax Net Profit Equity capital Face value EPS

9 Ratio Analysis Particulars FY12A FY13A FY14E FY15E EPS (Rs.) EBITDA Margin (%) PBT Margin (%) PAT Margin (%) P/E Ratio (x) ROE (%) ROCE (%) Debt Equity Ratio EV/EBITDA (x) Book Value (Rs.) P/BV Charts

10 OUTLOOK AND CONCLUSION At the current market price of Rs , the stock P/E ratio is at x FY14E and x FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs and Rs respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 30% over 2012 to 2015E respectively. On the basis of EV/EBITDA, the stock trades at x for FY14E and x for FY15E. Price to Book Value of the stock is expected to be at x and x respectively for FY14E and FY15E. We recommend BUY in this particular scrip with a target price of Rs for Medium to Long term investment. INDUSTRY OVERVIEW Bakery The Company s Bakery portfolio includes biscuit, bread, cake and rusk. Biscuit is the largest of these categories, and has attracted a vast array of competitors ranging from multinationals, on the one hand, to large national local companies and smaller regional players. Cake, rusk and bread on the other hand compete mostly with regional brands with Britannia being the only national player. Overall Bakery, despite the general economic sluggishness, is still growing at 12-14%, with specific segments within that, growing faster at the top end, driven by differentiation and new taste experiences, and at the bottom end, through availability and affordability. Britannia, with about a third share of the biscuit market and a dominant share of other baked categories is well poised to benefit from this growth, driven by the diversity of its product range and its availability footprint. The food market itself has seen some interesting structural changes in the past few years with the emergence of a diversified palate of choices across functional and indulgent products. Additionally, with greater affluence and exposure, consumers are increasingly migrating from unbranded commodities, sold loose, to branded and packaged solutions that are hygienic and convenient. The Company, therefore expects the overall Bakery market to grow 13-15% in the coming year.

11 Dairy India continues to be world s largest producer and consumer of dairy products. While liquid milk consumption continues to drive the industry, the dairy market is also witnessing a significant shift in value added milk products like branded and packaged dahi, yoghurt, cheese, UHT milk and other milk based beverages. Milk prices remained stable during the year which gave a further boost to the industry. As mentioned earlier, with higher disposable income, a greater array of choices and an increasing health and nutrition consciousness, the dairy industry will continue to benefit from the migration to branded and valueadded milk and milk based products. This has also increased industry competitiveness with local and regional players going national and international players extending their presence and business portfolio. Accessibility, coupled with superior differentiation is creating new categories and usage occasions indairy. Increasing competitive intensity also means increased investment in infrastructure creation, all of which will ultimately benefit the Indian consumers, as more and better quality products are created and launched. OUTLOOK The domestic market for packaged, branded food is expected to grow 13-15% in the near term. The challenge to profitable growth comes from the trend in commodity prices, the general economic sentiment and a macro environment that contributes to operational stability in the manufacturing units and markets. Simultaneously, the Indian market opportunity and food market growth will attract new local and international players with deep pockets and a differentiated capability in their domains of operation to enter and expand operations in India. Creating a leadership position in this environment will demand that Britannia s brands and their propositions are relevant and exciting for consumers and differentiated enough to create a higher preference and purchase. Britannia s focus is on differentiating its products and continually renovating and innovating them to create unique and superior experiences for its consumers and customers. This, combined with effective cost management will generate profitable growth. International markets present an opportunity to segment and channel resources to generate profitable growth which is accretive to the domestic business and which the Company has demonstrated. Based on the opportunities in international markets which the Company has isolated, the strategy focuses on key brands in key markets to commercialise those opportunities by sourcing from its factories in India, Dubai and Sohar. Britannia brands are now available in over 30 Countries.

12 Disclaimer: This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable but do not represent that it is accurate or complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it s affiliates shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provide for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision.

13 Firstcall India Equity Research: C.V.S.L.Kameswari Pharma U. Janaki Rao Capital Goods B. Anil Kumar Diversified Ashish.Kushwaha IT, Consumer Durable & Banking Suhani Adilabadkar Diversified M. Vinayak Rao Diversified Firstcall India also provides Firstcall India Equity Advisors Pvt.Ltd focuses on, IPO s, QIP s, F.P.O s,takeover Offers, Offer for Sale and Buy Back Offerings. Corporate Finance Offerings include Foreign Currency Loan Syndications, Placement of Equity / Debt with multilateral organizations, Short Term Funds Management Debt & Equity, Working Capital Limits, Equity & Debt Syndications and Structured Deals. Corporate Advisory Offerings include Mergers & Acquisitions(domestic and cross-border), divestitures, spin-offs, valuation of business, corporate restructuring-capital and Debt, Turnkey Corporate Revival Planning & Execution, Project Financing, Venture capital, Private Equity and Financial Joint Ventures Firstcall India also provides Financial Advisory services with respect to raising of capital through FCCBs, GDRs, ADRs and listing of the same on International Stock Exchanges namely AIMs, Luxembourg, Singapore Stock Exchanges and other international stock exchanges. For Further Details Contact: 3rd Floor,Sankalp,The Bureau,Dr.R.C.Marg,Chembur,Mumbai Tel. : / / Telefax : info@firstcallindiaequity.com