Prabhat Dairy Announces Entry into Dairy Beverage Segment

by Najuka G

§  Launches Prabhat Goodness Zone, plans to open 500 stores in Maharashtra in next three years

§  Launches Lassi, Chaas, Milkshakes Tetra Pak for Maharashtra market

§  Announces Annual Financial Results, Profit Before Tax for Q4 grows by 84.6% Y-o-Y

§  Cheese, Milk, Curd and Paneer main drivers for growth

Mumbai, May 2018: With a goal to become a top consumer dairy brand, Prabhat Dairy Ltd, fastest growing integrated milk and dairy products company in India, has announced new strategies for its B2C segment. The company has made its entry in to dairy beverages and launched Prabhat Goodness Zone, a franchise based chain of retail outlets. The Company also improved its profits and maintained an incremental revenue, which are in line with the Company’s Vision 2020.

The strategy is one of the two initiatives announced by the Company on the side-lines of its Q4 Financial Results for FY2017-18.

The dairy beverage market growing by 20-23% annually and is poised to further become three times by 2020. Citing high demand in the healthy drink segment, milk beverages are already becoming popular among the consumers, witnessing an exponential growth of about 54%. Prabhat’s major beverages, Milkshakes, Lassi and Chaas will be available in Tetra Pak. The Company plans to expand its beverage market in two phases. In Phase I, it will cover the Maharashtra state followed by pan-India expansion in Phase II.

The Company has also ventured in to retail outlet segment with the launch of ‘Prabhat Goodness Zone’ in the state of Maharashtra. The venture is an ambitious project aimed at increasing its market share in B2C segment across the State as it targets to create 500 stores by FY2022. The company has already piloted the ‘Goodness Zones’ in Ahmednagar district and is looking for fast expansion under its renewed identity across the state.

Commenting on the announcement, an excited Mr Vivek Nirmal, Joint Managing Director & CEO, Prabhat Dairy Ltd said, “At Prabhat, we constantly strive to provide consumers’ the ultimate product experience. Hence, we consistently keep on researching and churning out new products which help us in growing our presence in the market place. Our retail chains would be catering as a counter sale and local distribution point for Prabhat’s milk and milk based products. We are excited about Goodness Zone which would provide us direct access to newer markets through which we can reach to millions of customers in short span.”

Prabhat Dairy also announced its Annual Financial Results for FY 2017-18 on Friday. Commenting on the financial performance, Mr Nirmal added, “Our revenues are growing consistently year-on-year. Our sales, especially in the B2C segment, has gone up as we are consistently investing in B2C segment. We have outperformed in the latest quarter and will continue to see rise in the coming year which is crucial for us in terms of further strengthening in existing markets.”

The ‘Goodness Zone’ will sell all milk based products such as Packaged and Toned Milk, Ghee, Cheese, Chaas, Lassi, Dahi, Shrikhand, Paneer, Milkshakes, etc. under its umbrella brand ‘Prabhat’. The Company has already received multiple enquiries from other parts of Maharashtra and is soon planning to expand the outlet chain to other states. The outlets would also provide direct home deliveries. With a strong hold in Maharashtra, the Company is currently identifying areas which has over 4,000 litres of milk sale and is already entertaining multiple offers from retail distributors across the State.

Prabhat Dairy boasts of having the best milk procurement systems in the country. It has recently added 100 bulk milk coolers in Maharashtra which now stands at 230 in total.

Financial ResultsThe total revenues for FY 2017-18 totalled Rs 1,557 crore, an increase of 10.3% compared to revenues of Rs 1,411 crore in FY2016-17. The Profit Before Tax rose by 84.6% in Q4FY1718 at Rs 21.9 crore compared to Rs 11.8 crore in Q4 FY16-17. This is mainly because of increase in the sales of cheese, which has doubled over last year. Milk, paneer and curd are other products which are driving major sales for the Company. Increase in institutional sales and growth in B2C segment due to introduction of new products should further provide the base for the Company’s overall performance in the coming years.

Gross profit grew to Rs 348 crore, an increase of 26.5% compared last year of Rs 275 crore. Gross margin remained up and increased to 22.4% of total revenues. The improvement in gross profitability is due to lowering of milk prices that has helped.

The EBITDA for Q4 in FY2017-18 stood at Rs 41.5 crore, an increase of 36.6% compared with Rs 30.3 crore during the Q4 last year.

About Prabhat Dairy Limited: Prabhat Dairy Limited is India's one of the largest and leading integrated milk and dairy products companies catering to institutional, as well as, retail customers. It manufactures fresh, dry, frozen, cultured and fermented dairy products, including pasteurized milk, flavoured milk, sweetened condensed milk, ultra-pasteurized or ultra-high temperature (UHT) milk, yoghurt, dairy whitener, clarified butter (ghee), milk powder, ingredients for baby foods, milkshakes, lassi, chaas, shrikhand, paneer and cheese. The Company sells its products under its retail consumer brands as well as ingredient products or as co-manufactured products inter alia to a number of institutional and multinational companies.

With the state-of-the-art plant in Shrirampur and Turbhe, cutting edge technology and stringent quality standards, the products deliver unmatched quality. The company is currently engaged in expanding its product portfolio in the consumer segment and is aiming to expand its presence across major cities in India. According to the Company’s Vision 2020, the management is aiming to double its revenue by FY2020 with a revenue target of Rs 2,000 crore.