Kwality

India’s largest dairy company with milk processing capacity of 3.4 Mn Litres /Day. The product range includes variants of pouched milk, ghee, cow ghee, Livlite 85% less cholesterol ghee, curd, skimmed milk powder, wake up creamer, chaach, lassi and other dairy products.

Kwality posted a good set of numbers for Q2FY17. Net sales rose 9% (YoY) at Rs.1540 crore. EBITDA came in at Rs.103 crore, up 20% and margins bettered a bit from 6.07% to 6.69%. The company had a 78% drop in other income. Net profit was at Rs.42 crore, up 13%; the 75% increase in tax outgo most certainly dented the bottomline.

The company has significant outgo on interest; for H1FY17 it was at Rs.77 crore. Borrowings stand at Rs.1477 crore and cash is at Rs.73 crore. Annualised EPS (FV of Re.1) on an equity of Rs.23.61 crore is at Rs.12. Promoters hold 64.4% stake.

Its B2C business grew significantly during the quarter, up 36% at Rs.606 crore. During the quarter it increased its procurement network to 3,25,000 farmer families across 4,500 villages in U.P., Haryana, and Rajasthan, incurred capex for capacity augmentation, launched its new brand campaign and products, expanded its sales and distribution network to 1,900 distributors with network of 45,000 touch points. The company is in the process of launching value-added products such as flavored milk, tetra pack milk, cheeses in numerous variants, yoghurts, cream, table butter, amongst others.