The news of the company's intention to reward shareholders with a bonus spread like wild fire across the bourses with domestic and foreign institutional investors jumping on to the bandwagon.

According to brokers, the news led to a sharp spurt of over 6 per cent in the scrip. The stock touched Rs 1,515 within 10 minutes of the announcement. The stock touched an intra-day high of Rs 1,525.15 with over 77,000 shares changing hands on the BSE. The stock, however, closed at Rs 1,441 on the NSE, registering a net gain of Rs 36.

According to brokers, the extension of NSE's trading session on account of the initial technical snag provided an opportunity for the domestic operators to book profits at thehigher levels.

With the company having announced the date for the meeting, speculation on the ratio was a prominent feature of the second phase of the trading session. Analysts and brokers now expect a liberal bonus of 1:1. The company has a relatively low equity of Rs 18.57 crore and huge reserves of over Rs 93 crore, thereby yielding a strong book value of over Rs 62. It may be recalled that on July 16, 1998, Britannia touched an eight-year high of Rs 650 on bonus expectations.

According to brokers, although rumours of a bonus by the company petered out in July 1998 itself, the first quarter of 1999 saw several fund managers pick up huge chunks of the stock at Rs 800 levels. Leading UK-based fund managers were rumoured to have picked up chunks, which helped the stock breach the crucial barrier of Rs 1,000 during the last week of April.

Sources also highlighted that fresh buying came in the light of the plant visit and the one-on-one analysts' meet organised by the company in the last quarter of1998.

Britannia recorded an impressive growth in the nine months of the previous fiscal. Sales were up nearly 22 per cent during the period. The company's operating profit increased nearly 36 per cent despite a significant rise in total expenditure. Britannia's net profit increased by over 33 per cent. Tax obligation and depreciation shot up by 29 per cent and 43 per cent, respectively.

The company has also decided to move out of all unrelated businesses and focus on its foods and beverage operations in addition to modernising its packaging systems, which has been undertaken by its French associate, Groupe Danone. During the first quarter of the previous fiscal, sales increased by over 26 per cent from Rs 185 crore to Rs 234.8 crore. Net profit grew by over 34 per cent from Rs 6.4 crore to Rs 8.6 crore.

In the second quarter, while turnover climbed to Rs 265.5 crore from Rs 219.4 crore in the previous corresponding quarter, net profit rose from Rs 7.5 crore to Rs 10.23 crore. For the third quarter,sales increased nearly 18 per cent to Rs 260 crore from Rs 221 crore in the previous corresponding quarter. Net profit climbed from Rs 7.5 crore to Rs 9.9 crore, up 32 per cent.

Biscuits and high protein food are the mainstay of BIL's business. They contribute 85 per cent to the turnover with bread accounting for nearly 10 per cent. The rest is shared by the cakes and export segments. BIL's portfolio consists of 35 products, including top selling brands such as Mariegold, Fifty-Fifty, Coconut Cruchies, Glucose-D, Pure Magic, Snax, Nice, Bourbon, Goodday etc. It's bread brands comprise Britannia and Britannia and Britannia Premium Bake.