The Ibs Times 39 Edition - Analytical_eye(4)

THE IBS TIMES

Analytical Issue— 5

8th December 2008 [Monday]

COMPANY PROFILE: BRITANNIA INTRODUCTION Britannia, one of the premier food product company in India. Britannia started as a small biscuit company in 1892 and has grown to a household name. Britannia started its business in Calcutta (now Kolkata) with an initial investment of Rs. 295. From thereon, Britannia's business flourished acquiring a reputation for quality and value. Britannia Industries Ltd. has a number of awards and accolades in its name like: Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World'. The Economic Times pegged Britannia India's 2nd Most Trusted Brand.

EXISTING PRODUCTS Britannia product line includes biscuits, snacks, packed milk, cheese, butter, buttermilk and yogurt. Britannia owns popular brands like: NutriChoice SugarOut. NutriChoice Digestive Biscuit. Treat Fruit Rollz. New Britannia Milk Bikis. Britannia Marie Gold Doubles. Britannia 50-50. Tiger.

Index

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ORGANIZATION Company Profile: Britannia

SIP Achievers

Britannia is headed by Mr.Nusli N Wadia, Chairman and Ms.Vinita Bali, Managing Director.

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The Wadia Group (parent company of Britannia) along with Groupe Danone of France has turned up to be an International FMCG Major specializing in Fresh Dairy Products, Bottled Water and Biscuits/Cereals. One of the World leaders in the food industry, some of its achievements are: No # 1 worldwide in Fresh Dairy Products. No # 1 worldwide equally placed in Bottled Water (by volume). No # 2 worldwide in Biscuits and Cereal Products.

Interview GROUPE DANONE three core business areas are Fresh Dairy Products, Beverages and Biscuits and Cereal Products strives to improve the lives of people around the world by providing them with better and value added food products.

Market Review

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Thinkers For a Better World

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Its dominant position worldwide is based on major international brands and on its rock solid presence in local markets (about 70% of global sales come from brands that are local market leaders).

The IBS Times

Company Profile (contd..) PERFORMANCE Britannia has registered a turnover of Rs 21,993 million for the year ended 31st March 2006-07. Britannia has posted Net Profit to the tune of Rs 1076 million for the year ended 31st March 2006-07.

The Company achieved these results despite significant increases in input cost, particularly sugar, fuel and oils, coupled with aggressive pricing in the industry. The Company's focused initiatives on commercializing market place opportunities, supply chain efficiencies and overall cost management resulted in its top line growth and profitability. Operating margin at 10.3% in 2005-06 compared with 10.9% in the previous year was impacted by the inflation in input costs. Despite stiff competition, the Company stabilized and held its overall market share at 31.7% in volume and 38.8% in value for the last year. Exports turnover during the year was Rs 111.71 mn against Rs 71.65 mn in 2004-05, a growth of 56%. NEW PRODUCTS: The Company's largest brand - Tiger, was successfully renovated with the re-staging of Tiger Glucose and the fortification of Tiger Creams. New variants were introduced in Treat Duet and "Pepper Chakkar" was launched under the 50:50 brand umbrella. The Company also introduced MarieGold Doubles in a totally new to market format and a new range "Greetings" - an assortment of biscuits was introduced during Diwali, targeted at the large gifting opportunity. The Company also seized the growing opportunity in adjacent categories like Cakes and the launch of Cup Cakes .

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The IBS Times

SIP Achievers– Interview Mr. SIDDHARTH MERATHIA Tell us about your educational background and your field of specialization? I am a Commerce graduate and a trained lawyer with specialization in corporate laws; now an MBA too!! All my higher education has been in Hyderabad.

From which company did you finish the SIP project? The company were I interned is GEMI Motors- Regal Beloit Corporation, GTCI center Hyderbad.

What was the profile offered for the project? I was offered the profile of an external consultant for SOX (Sarbanes and Oxley Act) Compliance and Corporate Governance. I had to make the Hyderabad center of the company SOX Compliant. I can proudly say that it was a stroke of rare luck that I did start the work of SOX Compliance in the unit and majority of my recommendations were implemented in the company across geographies. This was professionally rewarding and also led to an award of the “Best SIP- 2008” from IBSAF and IBS Hyderabad.

How was your work experience with the company? The work experience with the company was fantabulous. The scope of work was vast and I had to work in the given time frame and make the unit SOX compliant which was also a challenge right from the word ‘go’. I had to encompass the working of the entire unit from all the functional areas viz:- Finance, HR, Admin, Operations etc. Then create a road map for its compliance with SOX. I also did a lot of research on the industry Best Practices and Corporate Governance norms. The mandate of the SOX and all the frameworks revolving around it is about establishing internal control mechanisms in the company so that it is tamper proof and is anti- fraud. The atmosphere at the workplace was congenial and the management was very cooperative.

Were you able to relate the theory learnt with the practical experience? Oh Yes! I not sure about the technical formulae and the jargons but the managerial perspective which we develop over the First Year of the MBA Course certainly helps. I had an accounting and a legal background which acted as cornerstones for my successful project completion. Above all this ‘People Management’ and ones Interpersonal skills are the most important techniques that comes handy when one steps into the real work environment.

How was the entire Interview Process executed? I had a telephonic interview with my company guide. It was a bit technical in nature. They checked my competencies in the legal and financial domain. Flexibility and willingness to work in a given time frame was also their concern.

What are the essentials for a successful interview? Well there is no rule of the thumb to crack an interview. One must be positive, confident and poised when facing an interview. It’s not only the aptitude but is the attitude that matters the most. Seasoned interviewers cannot be foxed and can easily see through ones personality within minutes of the process. The best technique is to be honest and frank. It’s perfectly alright if one has to say “No” or “I do not have an exact idea but of what I know this is….” to a question rather than beating around the bush.

Contd……...

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The IBS Times

SIP Achievers– Interview Mr. SIDDHARTH MERATHIA What are your suggestions for the juniors? Take your SIP term seriously. It’s the only time when one can test his/her abilities and competencies. Most of the times we are not sure about the work we would like to do or the industry we would like to make or start our career.SIP term provides that window were this problem can be partly addressed. One is free to make mistakes (which if committed in actual work life post studies would lead to sticky situations) and learn from them. It revitalizes the learnings and skills one builds over the years and appreciate the two year MBA course better when one gets back to B-School after the term.

What are the ways to cope up with the stress? Stress is the byproduct of adult life. My recipe to cope up with are:A 10 minute mediation. This can be done any time in the day. Listen to good soothing music or anything of your choice. Time Mangement- Finishing work and Being on time saves a you from a lot of stress. An Evening out with friends or loved ones relaxes you completely.

How to go about with the procedure of preparing the final SIP Report? This is one of the most important documents that one needs to prepare as a part of the term. To make it look good and comprehensive these steps can be followed:Keep a record of all the material (hard & soft copies) collected during the SIP period and used for specific work over the term. Have a note of all the hyperlinks or the sources of the material. Make a capsulated report that captures the essence of the SIP work. No one has the time to read lengthy and voluminous reports. Highlight the important statistical figures and areas of the report. Make acknowledgement, Index, References, Footnotes.

Tell us about situations when you had to behave as a leader or display your leadership skills or your managerial skills? Well I had to do this daily and I thoroughly enjoyed it. I had the role of an external consultant in the organization and had to establish the required synergies between the various functional departments as per the SOX Act and other best practices manuals. For this I had to take detailed interviews with the members of the staff and the top management. This requires management skills and is not that easy a task. After the research; collaborating the material and synchronizing it with the available guidelines requires your skills to be in place. I had to convince the management on various viewpoints and the change management process that I was trying to bring about in the company. The enormous exposure and opportunities one gets in this institute helps build a strong managerial aptitude and inculcates leadership skills. Wishing You All the Very Best! SIDDHARTH MERATHIA [email protected] 9948441011

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The IBS Times

Market Update The market staged a remarkable rally on Thursday and the benchmark indices Sensex and Nifty shot up by 482 points (5.51%) and 132 points (4.95%) respectively as hopes of a strong stimulus package from the government to boost the economy triggered frenzied buying in bluechip stocks. But the mood turned bearish on the final session and with several bluechip stocks crashing down following a big sell-off in afternoon trade, it was a negative close for the market last week (December 1 - 5, 2008). Recording losses on three of the five sessions, the Sensex ended the week lower by 127.52 points or 1.40% at 8,965.20. The Nifty slipped 40.70 points or 1.47% to 2714.40 last week. Earlier, it was a weak start for the market on Monday as a negative global sentiment prompted a sell-off. The Sensex declined by over 250 points and the Nifty plunged by around 72 points in that session. For a brief while that morning, the market showed some signs of a recovery following a cabinet reshuffle. While P. Chidambaram, the erstwhile Finance Minister took charge as the new Home Minister, the Prime Minister, Manmohan Singh, took the Finance Ministry under his direct control. The recovery proved extremely short-lived. The mood was not any significantly different in the following session though buying at lower levels aided the cause of a few blue chips and restricted the BSE barometer's loss to just around 100 points. The Nifty lost close to a per cent or 25 points that day. The market was extremely listless on Wednesday. Though there were expectations that the government and the central bank would spell out measures to tide over the liquidity crunch, investors remained wary of holding positions at higher levels in that session. The Sensex, which moved in a range of around 250 points, ended at 8747.43 with a small gain while the Nifty closed 1.35 points down at 2656.45. Then came the splendid surge. Expecting a solid stimulus package from the government and a liberal rate cut by the Apex bank, investors went on a buying spree that lasted the entire duration of the session on Thursday. A positive trend on the European bourses and higher index futures too aided the sentiment. As buying was quite widespread, all the sectoral indices closed on a positive note on Thursday. However, after Thursday's impressive surge, the market went into a selling mode on Friday as concerns over weakening global economy took centre stage. Save for a brief while in morning trade when it recorded a modest surge, the market spent the session deep down in the red that day. Among the sectoral indices, BSE IT and Teck tumbled by 7.88% and 4.21% respectively. The Consumer Durables index eased by 7.52%. The Auto index lost 3.53% and the Healthcare barometer declined 2.23%. The Oil & Gas index shed 2.19% as key oil stocks fell on an imminent cut in petrol and diesel rates. The FMCG and PSU indices also closed weak. As realty stocks bounced back on hopes of a rate cut and release of liquidity, the BSE Realty barometer advanced by 8.4% last week. BSE Metal climbed up 5.85%. The Bankex surged 1.34% and the Power index edged up by a little over a per cent. The Capital Goods index posted a gain of 0.34%. The BSE Midcap and Smallcap indices gained 0.25% and 0.57% respectively.

Technical Round up Vigorous fire-fighting is on across the globe with central banks slashing interest rates blindly and stimulus packages being doled out all around in a bid to reduce the impact of recession. If reaction of equity markets in respective countries to such measures is anything to go by, any euphoria induced by the package promised to us over the weekend is not likely to last beyond a day. One positive factor to be noted in the charts of most global indices is that they are still holding well above their October lows. That keeps the door open for a Santa Claus rally to jingle through equity markets in the second half of December. Trading was extremely lackadaisical with very low volumes in both cash and derivatives market. Open interest in the futures and options was abysmal, below Rs 40,000 crore, implying lack of conviction among traders. It was status quo in the Sensex last week with the index scarcely budging beyond the narrow range defined in the previous week. Momentum indicators in the daily chart are displaying positive divergence signalling that the index can move higher in the nearterm. Weekly oscillators are however still very weak reflecting the bleak medium-term picture. It needs to be borne in mind that the trend along long-term, intermediate term and short-term time-frame is down. The mediumterm trend is however sideways and the range that is envisaged for this period is between 8000 and 11000. The index is pausing close to the lower boundary and moving sideways is a very lacklustre fashion. As explained last week, an upward reversal from here will take the index higher towards 10323 or 10945 again. Conversely, a close below 8500 will mean that the down-move that began from 10945 is unfolding its third leg that has the targets at 7715 and 6794. We have a neutral view on the prospects of the week ahead. The resistances would be at 9970 and 10500 where the 50 day moving average is positioned. A close above 10500 can usher in a move to 11564. Supports would be at 8500, 8316 and 7697.

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The IBS Times

Market Update WEEKLY GAINERS Prev Close (Rs)

Company

WEEKLY LOSERS

Current Price (Rs)

% Change

74.20

105.90

+ 42.72

NDTV 23.10

30.80

+ 33.33

126.85

165.65

+ 30.59

Unitech Ltd. + Sun TV Network Ltd. +

163.85

211.80

+ 29.26

LIC Housing Fi +

44.35

36.90

-16.80

198.35

166.90

-15.86

298.80

251.65

-15.78

170.45

144.40

-15.28

395.40

336.45

-14.91

148.80

127.00

-14.65

137.30

118.05

-14.02

36.70

32.10

-12.53

GTL Infra-

Sterling Biotech Ltd + Jain Irrigation + Rolta India +

68.10

87.55

+ 28.56 Bhushan

97.75

124.40

+ 27.26

EIH Ltd. +

Tata Steel

Current Price % (Rs) Change

+

+

Bharat Electroni +

Prev Close (Rs)

+

+

IRB Infrastructure D +

Company

+ +

559.25

704.15

+ 25.91

150.95

182.80

+ 21.10

HCL Technologies + Spice Communications

THINKERS FOR A BETTER WORLD We like bubbles. Admit it. The last bonus for many had much to do with those exuberant times. Well, now that we are down on your drink and your house is worth less than that last peg, start listening to Shiller. It is not often that one makes two Cassandra calls. Shiller rightly called the stock market’s irrational exuberance in 2000 and the real estate market’s peak in 2005. We did not listen to him then? Shame on us.

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The IBS Times

EDITORIAL TEAM Editors : Abir Zara Khan, Deepika Pandey, Gautam Lunawat, Ishita Singh, Kavitha Koteeswaran, Nidhi Gupta, Rohit Sinha, Sanjana Bhuwalka, Uzma Rizvi, Varun Bhagath Mentor : Puneet Thakur

Disclaimer: This newsletter is just a compilation of news from various sources. Thus, readers are expected to cross-check the facts before relying upon them. Though much care has been taken to present the facts without error, still if errors creep in, necessary feed backs will be always welcomed. Editors will not be responsible for any undertakings. The newsletter is not meant for sale and hence, no part of the newsletter should be used without the prior permission of the editorial team.

Sources: The Economics Times, The Hindu BusinessLine, Times of India, Business Standard, Financial Express, Financial Times, Business Week, Business World, The Economist, Wall Street Journal, Bloomberg, Reuters, Moneycontrol.com, Vccircle.com, yahoofinance.com,

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