Food sector

Group members:

M1609 Aashish Razdan

M1754 Sushma Yadav
M1755 Vandana Dandage
M1756 Varun Gole
M1757 Velankani Fernandes
 ABOUT FOOD SECTOR

• The food industry is a complex, global collective of

diverse businesses that supplies most of the food
consumed by the world population.
• Broadly, the food industry comprises a complex
network of activities pertaining to the supply,
consumption, and catering of food products and
services across the world. Finished food products
and partially prepared ‘instant’ food packets are
also a part of the food industry.
BRITANNIA

• Britannia Industries is one of India’s leading food companies with a

100 year legacy and annual revenues in excess of Rs. 9000 Cr.
Britannia is among the most trusted food brands, and manufactures
India’s favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis
and Marie Gold.
• Britannia products are available across the country in close to 5
million retail outlets and reach over 50% of Indian homes.
• Britannia Bread is the largest brand in the organized bread market
with an annual turnover of over 1 lac tons in volume and Rs.450
crores in value. The business operates with 13 factories and 4
franchisees selling close to 1 mn loaves daily across more than 100
cities and towns of India.
 NESTLÉ

• NESTLÉ India is a subsidiary of NESTLÉ of Switzerland. With eight

factories and a large number of co-packers, Nestlé India is a vibrant
Company that provides consumers in India with products of global
standards and is committed to long-term sustainable growth and
shareholder satisfaction.
• Nestlé is the world’s largest food and beverage company. It has more
than 2000 brands ranging from global icons to local favourites, and
it is present in 191 countries around the world.
KELLOGG’S

• Kellogg's, is an American multinational food manufacturing

company.
• Kellogg's produces cereal and convenience foods, including cookies,
crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen
waffles, and vegetarian foods.
• Kellogg's products are manufactured in 18 countries and marketed
in over 180 countries.
 KWALITY

• Kwality Dairy (India) (KDIL) India’s premier dairy foods company,

focuses on building leadership positions in branded and added value
markets across the dairy sector. KDIL specializes in the storage of
milk and related products.
• The plant has a capacity of processing 4,50,000 litres of milk per
day and with its ongoing expansion programme is soon going to be
increased by another 4,00,000 litres per day. The plant has a
ghee capacity of 1000 Mt per month. The people at KDIL are clearly
focused on quality, efficiency and continual improvement.
Liquidity Ratios
 Current Ratio

• Formula
CR = Current Assets / Current Liabilities
Britannia Kellogg’s Kwality Nestle
2014 - - - 1.54

2015 1.34 0.56 1.42 1.77

2016 1.30 0.66 1.45 2.09

2017 1.74 0.68 1.64 -

• Interpretation: Britannia is in a better position to cover its

Current Liabilities with its current Assets, compared to other
three companies. Where in the year 2016 Nestle was in a
better position to cover its Current Liabilities with its current
Assets.
 Quick Ratio
• Formula
QR = Quick Assets / Current Liabilities
Quick Assets = Current Assets – Inventories – Prepaid Expenses

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.92

2015 1.02 0.35 2.19 1.21

2016 0.97 0.38 2.33 1.51

2017 1.25 0.41 2.39 -

• Interpretation: Kwality is in a better position with Liquid

assets compared to other three companies.
Leverage Ratios
 Debt Equity Ratio

• Formula
DER = Total Debt / Shareholders Equity

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.01

2015 0.09 3.06 1.87 0.01

2016 0.06 3.81 1.72 0.01

2017 0.04 3.70 1.42 -

• Interpretation: Britannia is fairly a debt free company

compared to other three companies.
 Debt to Total Assets Ratio
• Formula
DTAR = Total Debt / Total Assets

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.004

2015 0.09 0.69 1.55 0.006

2016 0.06 0.69 1.29 0.006

2017 0.04 0.69 0.85 -

• Interpretation: Britannia is a fairly debt free company

compared to other three companies.
Coverage Ratios
 Debt Service Coverage Ratio
• Formula
DSCR = PAT + Dep +Non-Cash + Interest + Lease
Interest + Lease Rentals + Repayment on Term Loan

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.24

2015 5.93 0.16 2.36 28.57

2016 9.29 0.18 2.18 0.28

2017 10.21 0.002 2.19 -

• Interpretation: Britannia is better Debt Service Coverage

Ratio compared to others which implies that it can service its
Debt + Repayment + Rentals, better than others
Turnover Ratios
 Inventory Turnover Ratio
• Formula
ITR = Cost of Goods Sold / Average Inventory

Britannia Kellogg’s Kwality Nestle

2014 - - - 10.80

2015 10.19 14.15 36.87 2.60

2016 9.79 6.64 25.17 25.78

2017 7.31 6.44 23.77 -

• Interpretation: Kwality has better Inventory Turnover Ratio

compared to others, which implies that it is better able to
convert its inventories into sales. Where Nestle had better
Inventory Turnover Ratio in the year 2016.
 Debtors Turnover Ratio
• Formula
DTR = Net Credit Sales / Average Sundry Debtors
Britannia Kellogg’s Kwality Nestle
2014 - - - 114.12

2015 58.49 20.13 8.87 95.61

2016 37.05 10.11 4.26 96.92

2017 34.91 9.86 4.24 -

• Interpretation: Britannia has better Debtors Turnover Ratio,

which implies that Britannia is better able to collect the
money which was extended as credit sales. Where Nestle had
better Debtors Turnover Ratio in the year 2016.
 Inventory Holding Period
• Formula
IHP = 365 Days / Inventory Turnover Ratio

Britannia Kellogg’s Kwality Nestle

2014 - - - 33.78

2015 35.75 25.79 9.89 140.06

2016 37.25 54.98 14.49 14.15

2017 49.88 56.71 15.35 -

• Interpretation: Kwality has least Inventory Holding Period

compared to others, which implies that Kwality is better able
to turn its Inventory into sales compared to others.
Fixed Assets Turnover Ratio
• Formula
FATR = Sales / Average Net Fixed Assets

Britannia Kellogg’s Kwality Nestle

2014 - - - 3.09

2015 7.03 7.47 42.52 2.79

2016 3.78 3.62 17.28 6.51

2017 3.48 3.55 11.57 -

• Interpretation: Kwality has far better FATR compared to

others, which implies that Kwality is better able to use its
Fixed Assets to generate Revenue, compared to others
 Total Assets Turnover Ratio
• Formula
TATR = Sales / Average Total Assets

Britannia Kellogg’s Kwality Nestle

2014 - - - 10.82

2015 5.10 2.84 14.52 5.78

2016 2.52 1.29 6.61 10.66

2017 1.95 1.15 5.009 -

• Interpretation: Kwality has better TATR compared to others,

which implies that Kwality is better able to use its total
assets to generate revenue for the company, compared to
others. Where as in the year 2016 Nestle had better TATR.
Profitability Ratios
 Gross Profit Margin
• Formula
GPM = Gross Profit / Sales

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.05

2015 0.39 0.34 8.71 0.06

2016 0.41 0.36 8.47 0.05

2017 0.37 0.38 9.7 -

• Interpretation: Kwality has better gross profit margins

compared to others, which implies that Kwality is better able
to manage its Direct cost compared to others.
 Operating Profit Margin
• Formula
OPM = Operating Profit / Sales

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.03

2015 0.10 0.08 5.52 0.04

2016 0.14 0.10 5.71 0.04

2017 0.14 0.15 6.27 -

• Interpretation: Kwality has better OPM compared to others,

which implies that it is better able to manage its operating
expenses compared to others.
 Net Profit Margin

• Formula
NPM = Net Profit / Sales

Britannia Kellogg’s Kwality Nestle

2014 - - - 1.10

2015 0.09 0.04 2.83 0.12

2016 0.09 0.05 2.58 0.97

2017 0.10 0.09 2.82 -

• Interpretation: Net Profit Margin of Kwality is better than

others, which implies that it is better able to manage the non
operating expenses (Indirect Costs) compared to others
 Return On Capital Employed

• Formula
ROCE = NOPAT / Average Total Capital Employed

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.08

2015 0.36 12.91 41.14 0.07

2016 0.22 6.90 17.08 0.07

2017 0.18 11.28 31.44 -

• Interpretation: Kwality has better ROCE compared to

others, which implies that it is better able to use its Capital
Employed to earn NOPAT.
 Return On Equity

• Formula
ROE = Equity Earnings / Average Total Shareholders Equity

Britannia Kellogg’s Kwality Nestle

2014 - - - 3.94

2015 0.46 57.44 25.21 0.35

2016 0.28 34.20 19.20 6.12

2017 0.24 61.10 17.37 -

• Interpretation: Kellogg’s has better ROE compared to others,

which implies that Kellogg’s is able to generate better value
for shareholders as against its equity, compared to others.
Valuation Ratios
 Price to Equity Ratio
• Formula
P/E = Market Price Per Share / Earnings Per Share

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.01

2015 84.50 42.66 12.74 0.03

2016 72.21 37.70 13.66 0.01

2017 65.81 20.65 11.86 -

• Interpretation: Britannia has a higher P/E Ratio compared

to others, which implies that investors are willing to pay more
premium for a share of Britannia compared to others.
 Price to Book Value

• Formula
P/BV = Market Price Per Share / Book Value Per Share
Britannia Kellogg’s Kwality Nestle
2014 - - - 0.002

2015 21.58 12.25 3.05 0.002

2016 21.58 13.61 2.47 0.002

2017 21.58 11.76 1.97 -

• Interpretation: Britannia has a better P/BV Ratio compared

to others, which implies that investors are willing to pay more
premium for Britannia compared to others.
 Dividend Yield Ratio
• Formula
DYR = Dividend Per Share / Market Price Per Share*100
Britannia Kellogg’s Kwality Nestle
2014 - - - 0.17

2015 0.0045 0.03 0.12 0.19

2016 0.0045 0.03 0.12 0.16

2017 0.0045 0.03 0.12 -

• Interpretation: Kwality has the highest DYR, which implies

that Kwality pays a better dividend with regards to its market
price, compared to others.
 Dividend Payout Ratio
• Formula
DPR = Dividend Per Share / Earnings Per Share

Britannia Kellogg’s Kwality Nestle

2014 - - - 0.002

2015 0.38 135.54 1.55 0.005

2016 0.33 123.42 1.66 0.002

2017 0.30 70.25 1.44 -

• Interpretation: Kellogg’s has the highest Dividend Payout

Ratio, which implies that it pays a far better dividend as
regards its earning per share, compared to others.
THANK YOU!