- FY17 Revenues grew by 20.7% YoY to Rs 14,111.3 Mn
- FY17 Gross Profit increased by 14.3% YoY to Rs. 2,753.0 mn. Gross margin decreased by 109 bps YoY from 20.6% to 19.5%.
- FY17 EBITDA grew by 9.7% YoY to Rs 1,280.5 Mn, EBITDA margin of 9.1%
- FY17 PAT grew by 102.8% YoY to Rs 469.4 Mn
- Q4FY17 Revenues grew by 23.0% YoY to Rs 3,776.8 Mn
- Q4FY17 Gross Profit increased by 19.9% YoY to Rs 712.2 mn. Gross margin decreased by 49 bps YoY from 19.3% to 18.9%.
- Q4FY17 EBITDA grew by 17.9% YoY to Rs 303.4 Mn, EBITDA margin of 8.0%
- Q417 PBT grew by 25.3% YoY to Rs 118.7 Mn
- Q4 FY17 PAT decreased by 130.5% YoY from Rs. 58.4 mn. to Rs -17.8 mn.
- Higher deferred tax expense resulted in company reporting loss in the quarter
- The share of value added products increased to 88% of total revenue in the quarter driven by specialty ingredients and cheese.
- Co-gen Plant at Shrirampur commenced operations during the quarter.
- Launched Ice Creams under ‘Volup’ brand in key towns of Maharashtra like Nasik, Ahmednagar, Aurangabad, Jalgaon and Dhule.
- Entered into an MOU with Nutridor Ltd. Thailand for being it’s co-manufacturer for Cow Ghee, Mozzarella Cheese and Sweetened Condensed Milk.
- B2C share increased to 30% of total revenue during FY 17
- Net debt stand at Rs 194 cr, lesser than last year
- Working capital increase by Rs 85 cr mainly due to higher inventory levels of cheese and butter
- Capex for FY 2017 was RS 50 cr and around Rs 40 Cr is expected for 2018.
- Finance cost is down 27% for the year and is expected to remain around the same levels.
- Capacity Utilization for Ghee is 70% to 75%, for pouch milk is around 30%
- Gross margin in the customer business is in the range of 28% to 30% while gross margins in the B2B business is in the range of 18% to 20%
- For Q417, Milk procurement prices increased by 5% QoQ from Rs. 27.21 to Rs. 28.57 per litre as the raw milk availability continued to remain impacted.
- For FY17, Milk procurement prices increased by 32% YoY from Rs. 19.50 to Rs. 28.57 per litre.
- Buffalo milk is in the range of Rs.40, Rs.45 a litre in the North India.
- For Q417, milk procurement is 9 lakh litre. For FY 17 the average milk procurement is 8 lakh litre
- Milk procurement did not meet the previous expectation of 10 lakhs lite for Q4 because of lower production.
- Milk prices expected to around the same levels in FY 18, Might ease a little given good monsoon is expected.
- Capacity Utilization for Ghee is 70% to 75%,
- Capacity Utilization for pouch milk is around 30%
- Overall capacity utilization is currently at a range of 60%
- They intend to take the Overall capacity utilization to around 85% to 90% in the next two to three years,
- In B2B the prices are passed on with a lag of 1-3 months
- In some cases, it is passed on immediately in the month. In sometimes, it takes at least three months to pass on the prices.
- In the branded business however there are certain products wherein they need to absorb the prices and when the market moves up, the prices also move up.
- They have taken multiple price rises in the year. One in November, One in March and multiple times in the last 3-4 months for various products.
- In the last quarter around 80-90% of the price rise was passed on to the market
- Currently they have around one-lakh retail touch points.
- 60,000 to 65,000 retail touch points are direct by the company.
- Around 30,000 to 35,000 retail touch points are indirect because we also have a very strong wholesale network.
- This is mainly serviced by 1200 distributors in Maharashtra as and 25 other states.
- For fresh dairy products (milk, dahi, paneer, shrikhand) there are 25000 stores (all of them in Maharashtra). Other products with longer shelf lif are sold in all 1 lakh stores.
- Distributors get a margin of 7% to 8% and retailers around 15% to 20%.
- All the states are serviced through 2 factories. One in shirdi and one in Navi Mumbai.
- No plans to increase the presence of fresh milk products on states other than Maharashtra in the next 2-3 years
- Expected to be neutral to positive.
- There could be some higher blockage of working capital requirement.
- Will have a mega project benefit as whatever tax they pay, we will be getting it refund on taxable product
Volup Ice-cream brand
- According to them, Ice cream market is growing at 25% to 30% plus CAGR.
- There are limited players in Maharashtra.
- There is a lot of space available not only in tier 1 towns, but in tier 2 and tier 3 towns as well.
- There are two brands; Sinsane is a premium category, which has SKUs ranging from Rs.40 to Rs.75 and Volup is a popular category which has SKUs ranging from Rs.5 to Rs.40.
- Present in 1200 outlets right now within in 45 days of their launch.
- The product response have been extremely good because of the quality while the USP is mainly only fresh milk and cream
- Increase the share of B2C segment to 50% by 2020 as compared to 30% currently
- Gain higher proliferation in the new states in which they have launched their products.
- Increase modern trade presence to 1000 by the end of FY18, compared to 140 this year.
- Increase overall capacity utilization to 85-90% in next 2-3 years, compared to 60% currently
- Gain Higher traction in the new Ice cream brand launched called Volup
- Scaling up their cheese business for which they had commissioned new cheese manufacturing facility with a capacity of 30 MT/day in 2015.