dairy market in india 2014 sample

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Dairy Market – India

February 2014

2 DAIRY MARKET IN INDIA 2014.PPT

Executive Summary

Market Consumption of dairy products has grown considerably worldwide Demand for dairy products is expected to escalate despite the recent surge in prices

Drivers & Challenges

Competition

Drivers —Growing Income and Consumption —Rapid Urbanization —Favorable Demographics —Rise in Bovine Population —Growth of Sub Segments and Other User

Industries —Marketing Campaigns —Growing Retail Market

Challenges —Inadequate Supply of Feed

and Fodder —Shortage of Cold Storage

Units —Poor Supply Chain and

Distribution Facility —Rise in Packaging Costs

Major Players

Company A Company B Company C

Exhibitions and Events Increased Global Attention Product Innovation Growth of Regional Milk Producers Corporate Activities

Trends

3

•Macro-Economic Indicators •Introduction •Market Overview •Market Segmentation •Consumer Insights •Import & Export •Drivers & Challenges •Government Rules & Policies •Government Participation •Trends •Competitive Landscape •Strategic Recommendations •Appendix

DAIRY MARKET IN INDIA 2014.PPT

4

Economic Indicators (-/-)

11

12

13

14

15

d1 c1 b1

a1

INR tn

Q4

c4 b4

a4

Q3

c3 b3

Q1

a2 b2

a3

Q2

d2 c2

2013-14 2012-13 2011-12 2010-11

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

0.0

0.5

1.0

1.5

2.0

%

Aug 2013 - Sep 2013

r

Jul 2013 - Aug 2013

q

Jun 2013 - Jul 2013

p

Oct 2013 - Nov 2013

t

Sep 2013 - Oct 2013

s

MOBILE INTERNET MARKET IN INDIA 2014.PPT

5

Global consumption of dairy products has grown remarkably over the past few years

Country Ranks – Milk production-wise (20--) Change in Global Protein Consumption

Global Dairy Market – Overview

•Consumption of protein-based food items are witnessing upward trend in the global market

•Milk and other dairy products hold an important position in normal diet and their consumption is also growing

•World milk production in 20-- was found to be ~A mn tonnes

Y%

Other Beverages Milk

Share of consumption of milk out of total

global beverage consumption

Rank Country Milk Production (mn tonnes)

1st EU-27 a1

2nd India a2

3rd USA a3

4th China a4

5th Russia a5

6th Brazil a6

Note*: EU (European Union) 20--

P5%

P4%

P3%

P2%

P1%

19--

N5%

N4%

N3%

N2%

N1%

Others

Cereals

Fruits & Vegetables

Dairy

Meat

Dairy consumption grew by a%

between 19-- and 20--

X%

Consumption share of milk (20--)

6

SAMPLE Indian Dairy Market – Overview (1/4)

The Indian dairy market is expected to witness remarkable growth…

• Indian dairy industry is huge and has gained substantial growth momentum over the past few years

•Dairy products have gained popularity among consumers due to various factors such as increasing income levels, hectic lifestyle and convenience associated with their consumption Being the world’s largest producer and consumer of dairy products, India represents one of the most lucrative dairy

markets

• In comparison with other products such as wheat and rice, milk penetration among consumers is as high as ~9-%

• In 20--, Indian dairy market was valued at ~INR x tn

20--e 20--e

x5

20--e

x4 x6

x7 x8

20--e 20--e 20--e

x3

20--

x2

20--

x1

INR tn

x9

20--e

Y%


Market Size & Growth

7

SAMPLE Dairy Market Segmentation – Rural and Urban

Domestic milk consumption is very high in both urban as well as rural markets

Share of Consumer Expenditure on Dairy Products (20--)

Consumption Share of Milk (20--)

X2%

X1%

Other Food Items

Dairy

Urban Consumers Rural Consumers

Y2%

Y1%

A1%

A2%

Do not consume milk

Consumes milk

Urban Consumers Rural Consumers

B1%

B2%

• Expenditure on dairy products account for a significant share of the consumer’s wallet

• Increased affordability is one of the reasons behind this growing trend

• In India, almost entire amount of milk produced gets consumed domestically

• Demand for processed and packaged dairy products is high in the urban market


8

SAMPLE

Import of Major Types of Dairy and Processed Dairy Products (1/5)

Whole Milk

Skimmed Milk

0 0

INR mn

20---20--

a4 b4

20---20-- 20---20--

a3

b3

20---20--

a2

b2

a1

b1

‘000 Kg

Volume Value

X2%

X5%

X4% X3%

X1% MALAYSIA

FRANCE

GERMANY

PHILIPPINES

SWITZERLAND

Y%

POLAND

Note: HS Code 04022910 (Whole Milk), HS Code 04021010 (Skimmed Milk)

0 0 p3

n4

20---20--

p2

20---20-- 20---20--

n2

p4

INR mn n3

200—20--

n1

‘000 Kg

p1

Volume Value

Major Importing Nations – Value Wise (20--)

Major Importing Nations – Value Wise (20--)


9

SAMPLE Drivers & Challenges – Summary

Drivers

Growing Income and Consumption

Rapid Urbanization

Favorable Demographics

Rise in Bovine Population

Growth of Sub Segments and Other User Industries

Marketing Campaigns

Growing Retail Market

Challenges

Inadequate Supply of Feed and Fodder

Shortage of Cold Storage Units

Deficit in Power Supply

Poor Supply Chain and Distribution Facilities

Rise in Packaging Costs


10

SAMPLE

`

Exhibition and Events

Increased Global Attention

Corporate Activities

Trends – Summary

Key Trends Product Innovation

Growth of Regional Milk Producers


11

SAMPLE

Key Ratios of Top 3 Companies – Operational Basis (FY 20--) (1/3)

Competitive Benchmarking (2/5)

0

Player A

y2

x1 %

x3

Player B

x2

x4

y1

Player C

Operating Margin Net Margin

• Player B recorded operating margin of x2%, higher than that of Player C which recorded operating margin of x3% but lower than that of Player a which recorded operating margin of x1%

• Net margin for Player A, Player B and Player C are y1%, y2% and y3% respectively, wherein Player A has the highest net margin among these three companies


12

SAMPLE Public: Domestic Company – Player A (1/5)

Key People

Products and Services

Company Information Offices and centers – India

Corporate Address xx

Tel No. xx

Fax No. xx

Website xx

Year of Incorporation xx

Ticker Symbol xx

Stock Exchange xx

Category Products/Services

Milk Products Just milk (UHT), Fresh cream, ice cream mix, instant dessert mix, coffee creamer, dairy whip mix

Name Designation

Head Office

Noida


13

SAMPLE Financial Snapshot Key Ratios

Financial Summary • The company incurred a net profit of INR mn in FY 20--, as compared to net

profit of INR mn in FY 20--

• The company reported total income of INR mn in FY 20--, registering a decrease of % over FY 20--

• The company earned an operating margin of % in FY 20--, an increase of - percentage points over FY 20--

• The company reported debt to equity ratio of X in FY 20--, an increase of Y% over FY 20--

Key Financial Performance Indicators

Indicators Value (27/01/2014) Market Capitalization (INR mn) xx Total Enterprise Value (INR mn) xx EPS (INR) xx PE Ratio (Abs) xx

Particulars y-o-y change

(20-----) 20-- 20-- 20-- 20--

Profitability Ratios Operating Margin 2.38 3.65% 1.27% 5.32% 5.35%

Net Margin -45.80 9.58% 55.38% 28.71% 6.77%

Profit Before Tax Margin -57.43 11.55% 68.98% 33.80% 7.71%

Return on Equity -65.18 6.12% 71.29% 39.53% 8.63%

Return on Capital Employed 0.68 2.26% 1.58% 6.54% 5.44%

Return on Working Capital 6.53 10.80% 4.27% 13.99% 11.38%

Return on Assets 0.46 1.84% 1.38% 5.19% 4.36%

Return on Fixed Assets 10.45 32.72% 22.26% 41.23% 23.94%

Cost Ratios Operating costs (% of Sales) -0.04 95.93% 95.97% 92.38% 94.35%

Administration costs (% of Sales)

-2.75 11.68% 14.43% 15.81% 13.27%

Interest costs (% of Sales) -0.48 1.78% 2.26% 2.33% 2.95%

Liquidity Ratios Current Ratio -45.43% 1.90 3.49 2.79 2.93

Cash Ratio -20.13% 4.27 5.34 2.55 2.64

Leverage Ratios Debt to Equity Ratio 491.55% 0.19 0.03 0.14 0.26

Debt to Capital Ratio 414.47% 0.16 0.03 0.12 0.20

Interest Coverage Ratio 27.93% 2.28 1.78 3.27 1.91

Efficiency Ratios Fixed Asset Turnover 45.63% 8.04 5.52 5.41 4.24

Asset Turnover 32.11% 0.45 0.34 0.68 0.77

Current Asset Turnover 66.63% 1.26 0.76 1.18 1.33

Working Capital Turnover 150.45% 2.65 1.06 1.84 2.01

Capital Employed Turnover 22.78% 0.48 0.39 0.84 0.96

Improved Decline

Net Profit/Loss Total Income

0 0

s3

t3

t2

20-- 20--

s2

INR mn s4

t4

20-- 20--

s1

t1

Public: Domestic Company – Player B (2/5)


14

SAMPLE

Public: Domestic Company – Player A (3/5)

Key Business Segments Key Geographic Segments

0%

20--

b4

a4 c4

20--

b3

a3 c3

20--

b2

a2 c2

20--

b1

a1 c1

80%

100%

60%

40%

20%

0%

20--

X%

India

Business Highlights

Description News

Overview

• It engages in the production and marketing of dairy milk and milk products in India

•The company is recognized as one of the leading producers of UHT milk, premium range of flavored milk, ultra pasteurized milk and UHT toned milk, among others In addition to dairy business, the firm is engaged in in real estate business, corporate and strategic

advisory services and business process outsourcing services

India is the only geographic segment in which the company has been operating for the last

four years

Services & Commodities Trading

Dairy Milk & Milk Products

Real Estate


15

SAMPLE

Description News

Manufacturing Facility

• Its manufacturing facility is well equipped with state-of-the-art dairy processing equipment from Denmark and France

• The environment-friendly plant is spread over a sprawling area of ~20,000 sq meters

•Modern technique of Ultra Heat Treatment (UHT) with direct steam infusion is deployed

•Aseptic packaging in co-extruded multi-layer PE (Polyethylene) and EVOH (Ethylene Vinyl Alcohol) film is done

Quality Assurance

• It adheres to ISO 9001 & 22000 principles that ensures production of high quality and safe milk and milk products

•Raw materials procured are matched with internal as well as external quality standards

• Processing and dispatch of finished goods is done strictly in adherence with the standard specifications

Public: Domestic Company – Player A (4/5)

Business Highlights


16

SAMPLE Public: Domestic Company – Player A – SWOT Analysis (5/5)

• x • x

• x • x

T O

W S


17

SAMPLE

Private: Domestic Company – Player A (1/5)

Key People

Products and Services

Company Information Offices and centers – India

Name Designation

Corporate Address xx

Tel No. xx

Fax No. xx

Website xx

Year of Incorporation xx Head Office

Category Products/Services

Milk Token milk, full cream milk, toned milk standardized milk, double toned milk, cow milk, skimmed and UHT toned

Dairy Products

Plain dahi, probiotic dahi, sweet dahi, lassi, fruit flavored lassi, plain chach, tadka chach, flavored milk, paneer, butter, cheese, ghee and ice cream

Noida


18

Private: Domestic Company – Player – Shareholding Pattern (2/5) Shareholders of the Company as on 05/06/2013 Ownership Structure

Name No. of Shares held

A -

B -

Total -

20--

X3%

20--

X1%

20--

X2%

Public financial companies

Ownership structure corresponds to Date of AGM: 30/09/2011, 19/07/2012 and 05/06/2013


SAMPLE

19

SAMPLE Financial Snapshot


Financial Summary

• The company incurred a net profit of INR mn in FY 20--, as compared to net profit of INR mn in FY 20--

• The company reported total income of INR mn in FY 20--, registering an increase of % over FY 20--

• The company earned an operating margin of % in FY 20--, an increase of - percentage points over FY 20--

• The company reported debt to equity ratio of x in FY 20--, an increase of y% over FY 20--

Net Profit/Loss Total Income

0 0

INR mn

20--

a1

b1

a2

b2

INR mn a4

b4

20--

a3

b3

20-- 20--

Key Ratios

Particulars y-o-y change

(20-----) 20-- 20-- 20-- 20--

Profitability Ratios Operating Margin 0.53 0.98% 0.45% 2.65% -0.02%

Net Margin 0.02 0.04% 0.02% 2.74% 0.06%

Profit Before Tax Margin 0.02 0.05% 0.02% 2.74% 0.11%

Return on Equity 0.55 0.87% 0.31% 39.23% 0.77%

Return on Capital Employed 2.00 3.49% 1.49% 8.08% -0.06%

Return on Working Capital 347.31 371.51% 24.21% 10.93% -0.08%

Return on Assets 1.51 2.68% 1.17% 8.08% -0.06%

Return on Fixed Assets 8.57 13.80% 5.23% 37.72% -0.35%

Cost Ratios Operating costs (% of Sales) -0.53 99.02% 99.55% 97.31% 100.02%

Administration costs (% of Sales)

0.00 0.00% 0.00% 0.00% 0.00%

Interest costs (% of Sales) 0.26 1.42% 1.16% 1.15% 1.59%

Liquidity Ratios Current Ratio -5.66% 1.01 1.07 4.91 5.24

Cash Ratio -48.88% 0.15 0.30 1.84 1.71

Leverage Ratios Debt to Equity Ratio 43.24% 5.06 3.53 3.70 3.39

Debt to Capital Ratio 7.14% 0.83 0.78 0.79 0.77

Interest Coverage Ratio 78.94% 0.69 0.39 2.33 -0.01

Efficiency Ratios Fixed Asset Turnover 20.59% 14.02 11.63 14.04 17.48

Asset Turnover 4.63% 2.73 2.60 3.01 2.92

Current Asset Turnover -0.51% 3.50 3.52 3.24 3.10

Working Capital Turnover 601.91% 377.52 53.78 4.07 3.84

Capital Employed Turnover 43.13% 21.48 15.01 14.13 12.82

Improved Decline


20

SAMPLE Business Highlights


Description News

Overview

• Texttexttexttexttexttexttexttexttexttexttexttexttexttexttexttexttexttexttext texttexttexttexttexttexttexttexttexttexttexttexttexttexttexttexttexttext

• It is involved in manufacturing and selling of milk and milk products in India and abroad In addition to the milk business, it is also engaged in other food business segments, including edible

oil, fresh fruits & vegetables, frozen products, juices, beverages, processed foods and grocery items

Texttexttexttexttexttexttexttexttexttexttexttexttext

Texttexttexttexttexttexttexttexttexttexttexttexttexttext

Texttexttexttexttexttexttexttexttexttexttexttexttexttext

Infrastructure

• In the manufacturing plant, milk processing is controlled by process automation whereby state-of-the-art microprocessor technology is adopted to integrate and completely automate all functions of milk processing to ensure high product quality, reliability and safety

Quality Assurance • It has ISO 9001:2008 (QMS), ISO 22000:2005 (FSMS) and ISO 14001:2004 (EMS)

certifications

Distribution Network

• In addition to the normal distribution system, it has its unique distribution network of bulk vending milk booths, retail outlets and mobile units

• It markets ~3.2 mn liters of milk daily in the markets of Delhi, Mumbai, Saurashtra and Hyderabad


21

SAMPLE Private: Domestic Company – Player A – SWOT Analysis (5/5)

• x • x

• x • x

T O

W S


22

Appendix

Ratio Calculations

Operating Margin (Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin (Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital (EBIT / Working Capital) *100

Return on Assets (EBIT / Total Assets)*100

Return on Fixed Assets (EBIT / Fixed Assets) *100

Operating Costs (% of Sales) (Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Ratio Calculations

Current Ratio Current Assets / Current Liabilities

Cash Ratio {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Debt to Equity Total Liabilities / Shareholders Equity

Debt to Capital Ratio {Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / (Shareholders Equity + Total Debt)


23

Sources of Information

Open Sources Annual Reports of Companies

Online Consumer Goods Magazines Magazines and Journals

Company Websites Leading Newspapers

Electronic Media Print Media

SECONDARY RESEARCH

PRIMARY RESEARCH

Interviews

Leading Industry Vendors and Distributors

Industry Experts


24

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dairy market in india 2014 sample

Business

bovine population

major importing

key people

indian dairy

recorded operating

domestic company

company reported

processed