With the launch of differentiated products across the branded foods segment, Britannia’s volume growth is likely to accelerate significantly going forward. New product launches, such as Healthy Start, Nutrichoice diabetic biscuits and Actimind milk will lead to an acceleration in volume growth. Its international business is largely focused on the Middle East, with a presence in Oman and Dubai.

The company’s operations in Oman have become profitable in FY11, even though production was impacted in February and March 2011 owing to the political events in the Arab world. The rise in prices of sugar, flour, fats and oils have impacted its consolidated EBITDA margins, which have decreased by 190 bps over the last three years. However, sugar and flour prices have stabilised in Q1 FY12. With stable commodity prices and the pass through of commodity inflation, the EBITDA margins are expected to improve. One can look at the stock for medium to long-term gains.