ICICI Securities Ltd | Retail Equity Research Prabhat Dairy is selling its milk processing business, which generates around 98.24% of total consolidated revenue of the company, to French group Lactalis' Indian arm Tirumala Milk Products for | 1,700 crore. After selling its core dairy business, the company intends to further develop its cattle feed business and expand into allied businesses such as animal nutrition and animal genetics, which forms the remaining ~1.76% of its...

ICICI Securities Ltd | Retail Equity Research Led by volume growth of 26% YoY, net sales for the quarter rose 8.5% YoY to | 418.4 crore, partly offset by 17% YoY decline in milk prices. Robust volume growth during the quarter was driven by increased sale of pouch milk, ghee, cheese, curd and paneer Gross margins improved 141 bps as milk prices declined substantially during the quarter mainly due to lower global skimmed milk powder (SMP) prices. EBITDA margins saw an improvement of...

Net sales for the quarter rose 7.3% to | 385.7 crore (I-direct estimate | 408.4 crore) on account of strong volume growth, partly offset by 23.7% YoY decline in milk prices. The company posted 36% volume growth during the quarter, largely driven by increased sale of pouch milk, ghee, cheese, curd and paneer Gross margins improved 194 bps as milk prices declined substantially during the quarter mainly due to lower global skimmed milk powder (SMP) prices. However, an increase in overhead...

Prabhat Dairy Ltd (PDL) reported healthy set of numbers in line with our expectation. In Q4FY18, its revenue grew by 7.4% yoy on back of volume growth across various products. Its EBIDTA grew by 34.8% and the company reported profit of Rs 17.6 cr as against loss in Q4FY17.

coming few years. PDL is investing heavily in manpower, procurement infrastructure, distribution and brand building which will impact margins till it achievesscale.Itsefforttobalancetheportfoliowithliquidmilkandgheeonone side for higher turnover and cheese and value added fresh dairy products on the othersideforhighermarginswillenablethecompanyreachdoubledigitmargins inthenext23yearsasprocurement&distributionefficiencyandhighercapacity utilizationkicksin.PDL'splantoopen500franchisedoutlets(TheGoodnessZone) inMaharashtrawillgoalongwayinbrandbuilding,howevergainswillbeback...

Gross margin expanded by 450bps due to lower milk prices (down 25%) and better product mix. However, EBITDA margin expanded by 200bps due to higher other expenditure (up 38%). The management continues to focus on increasing contribution from the B2C business with distribution expansion and new product launches. The company has launched exclusive branded outlets in tier II & III cities to create brand awareness and improve distribution. Over FY18-20, we expect revenue to grow at 13% CAGR, margin to expand by 120bps and ROCE improvement owing to better capacity utilization. We value Prabhat at 20x FY20E earnings with Target Price of Rs200. Maintain Accumulate....

ICICI Securities Ltd | Retail Equity Research Net sales for the quarter rose 7% to | 404.9 crore (I-direct estimate | 425.5 crore) due to strong volume growth & decline of 25.5% YoY in milk prices. It posted 30% volume growth during the quarter, largely driven by increased sale of pouch milk, cheese and curd Gross margins improved 453 bps as milk prices declined substantially during the quarter mainly due to lower global skimmed milk powder (SMP) prices. However, increase in overhead expenditure (manpower...

Prabhat Dairy Ltd (PDL) incorporated in 1988, as a specialty dairy ingredient company and has now emerged as an integrated milk and dairy products company in India. It caters to both institutional as well as retail customers.

Net sales for the quarter were flat at | 403.9 crore (I-direct estimate: | 449.7 crore) mainly on the back of 14% decline in milk price. The company reported volume growth of ~15% in the quarter. Gross margins improved 380 bps as milk prices declined substantially mainly due to lower global skimmed milk powder (SMP) prices. Milk procurement prices for the company were ~| 23/litre vs. ~| 26/litre in the corresponding quarter. However, overhead expenditure to...

Prabhat Dairy (Prabhat) reported 18.8% sales growth YoY to | 385.6 crore, below our estimate of | 415.7 crore. However, gross margin witnessed an expansion of 180 bps due to increase in contribution of value added products & benign milk procurement prices. Procurement prices softened from | 27.5/litre in Q1FY18 to | 25.5 per litre. However, they remain flat on a YoY basis Despite the impressive expansion in gross margins, operating margins contracted 30 bps to 8.2% primarily due to higher...

Prabhat Dairy (Prabhat) reported strong sales growth of 22.7% YoY to | 359.6 crore, in line with our estimate of | 355.2 crore. Sales growth was led by milk, skimmed milk powder (SMP), cheese and paneer segments. Value added products (including SMP) were 85% of the...

We met the management of Prabhat Dairy (Prabhat) to get an insight into the company's business and growth prospects. Established in 1998, Prabhat has evolved from a specialty dairy ingredients company to an emerging brand in the dairy industry. The company sells its products as a) ingredient products or co-manufactured products to institutional clients, which constitute 70% of its sales and b) a retail consumer brand under the name Prabhat, Prabhat Milk Magic and Prabhat Flava, which constitute the remaining sales. It has two plants in Shrirampur and Navi...

Refer to important disclosures at the end of this report Moving in right direction; Retain BUY Revenue growth strong at Rs3.8bn, grew 23% yoy, EBITDA at Rs298mn grew 17% yoy. APAT reported a loss of Rs 18mn impacted by higher tax rate due to deferred tax liability...

We met the management of Prabhat Dairy (Prabhat) to get an insight into the company's business and growth prospects. Established in 1998, Prabhat has evolved from a specialty dairy ingredients company to an emerging brand in the dairy industry. The company sells its products as a) ingredient products or co-manufactured products to institutional clients, which constitute 70% of its sales and b) a retail consumer brand under the name Prabhat, Prabhat Milk Magic and Prabhat Flava, which constitute the remaining sales. It has two plants in Shrirampur and Navi...

Prabhat Dairy Ltd (Prabhat) has established itself as a preferred specialty ingredient supplier to top MNC clientele. Its recent shift to focus on the B2C segment and introduction of a complete portfolio of dairy products augurs well for the next leg of growth. The strong outlook of the organized dairy sector and boost in consumption of VADP is expected to drive the revenues for the company. Moderate pricing, aggressive A&P; spend (1.4% of revenues) and focus on increasing distribution reach of B2C products is expected to help...

Prabhat Dairy (PDL) has marquee B2B clients like Mondelez, Abbott, Britannia and MotherDairyandhavestrongprocessesandqualityenablingthemtohavedouble digitmargins,abovetheindustryaverage.PDLisaimingtoincreaseitsshareofB2C...

Prabhat Dairy is a major integrated milk and dairy products player in western and central India and sells milk and related value-added products. Institutional sales to major MNCs/domestic FMCGs account for 75% of its sales and the rest is retail. We expect institutional sales to show...