Wadia Group to earn royalty for sharing its name across various group businesses

KOLKATA: The Wadia Group will earn royalty for sharing its name across the various group businesses and also earn a portion of their sales for creating and providing services under a common pool, group chairman Nusli N Wadia said.

Addressing shareholders in the 93rd annual general meeting of the Britannia Industries here on Monday, Wadia said the new structure of integrating common functions like HR, finance, taxation, legal and treasury across group companies will enable huge savings at the corporate level.

The Wadia group can earn up to 0.1 % of a group company's revenue as royalty and up to 0.25% as revenue for providing the common shared services. The Wadia Group has floated a formal structure under NowrosjeeWadia & Sons Ltd (NWS) to serve the interest of group companies across common functions like finance, HR, procurement, risk management, treasury, taxation, information technology and legal.

This is expected to maximise efficiency and effectiveness of the various businesses of the group such as airline, food, textile and chemical. Britannia Industries managing director Vinita Bali said the savings the various companies would have by using the shared services would be much more than the companies deploying it themselves.

Britannia on Monday declared its first quarter result ending June 30, whereby the company standalone revenue increased 11% at Rs 1221.62 crore during the first quarter and net profit grew by 4% at Rs 43.45 crore.

Britannia attributed the lower growth in net profit to higher base in last year corresponding quarter when there was an additional profit of Rs 10.4 crore generated from sale of property. The Britannia stock fell by 2.95% at Rs 459.70 on Monday's closing in the Bombay Stock Exchange.