Parag Milk Foods... Satisfaction Till The Last Drop

Posted by Dynamic Levels
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May 3, 2016
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Parag Milk Foods... Satisfaction Till The Last Drop

May 03, 2016 - 06:27:03 PM

Parag Dairy

It is a Pune based Company and was incorporated in 1992.The main business ois that of dairy-based branded food producer and is primarily involved in collection and distribution of milk. It also produces dairy-based branded consumer products which include cheese, ghee, curd, yoghurt, milk powders whey proteins, paneer, and dairy based beverages. Cow milk is the main ingedient for all its products.

Manufacturing Facilities locations:

Manchar (Pune district of Maharashtra)

Palamaner (Chittoor district of Andhra Pradesh)

 

It procures the the milk- its main ingredient from 29 districts across Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu, through a wide network of over 3,400 village level milk collection centres.

 

Products:

1. Gowardhan

Targeted at house-hold consumption and to be used as cooking ingredients.Fresh milk, curd products (curd / trim curd / buttermilk), ghee, paneer, butter, milk powders, whey proteins, gulab jamun mix and shrikhand are the main products under this brand

 

2. Go

Targeted at children and the youth generation and is primarily for direct consumption. Cheese products, UHT milk (go milk, go slim milk and go supremo milk), and fresh milk: go kidz, fruit yoghurts in six flavours, fresh cream and beverages (lassi and buttermilk in two flavours) are the main products under this brand.

 

3. Pride of Cows

Farm-to-home concept of milk directly delivered from the farm to a consumer's door-step, through a subscription model. The Target of this product is household consumers seeking premium quality cow's milk. The product under this brand is cow milk.

 

4. Topp Up

Targeted at the youth generation and travellers as a source of instant nourishment. Flavoured milk in six flavours is the main product under this brand.

 

The company’s main business lines and products are as follows:

  • Gross fresh milk accounted for 20.3% of its total revenues for the nine months ended 31 December 2015.
  • Ghee, butter and cream accounted for 28.5%
  • Cheese/paneer accounted for 18.7%
  • UHT (Ultra Heat Treatment) products accounted for 4.8%
  • Whey products accounted for 2.9%
  • Skimmed milk powder and dairy whitener accounted for 10.1%
  • Other products such as curd, fruit yoghurt, gulab jamun mix, and flavoured milk accounted for 4.9%

 

Parag’s manufacturing facilities are at Manchar and Palamaner with milk processing capacities of 1.2 million litres per day and 0.8 million litres per day, respectively.

 

Its institutional customers include restaurant and cafe chains such as Yum! Restaurants (India) Private Limited (for Pizza Hut, Taco Bell and KFC), Jubilant Foodworks Limited (for Domino‘s Pizza) and Sankalp Recreation Private Limited (for Sam‘s Pizza).

 

Parag Milk Foods Limited IPO Details

 

Company Promoters:

The Promoters of the company are:

1. Mr Devendra Shah
2. Mr Pritam Shah and
3. Parag Shah

 

The objects of the issue are:

1. To meet the capex requirements for expansion and modernisation of its existing manufacturing facilities at Manchar and Palamaner;
2. Investment in Subsidiary for financing the capex requirements in relation to the expansion and modernisation of the Bhagyalaxmi Dairy Farm;
3. Partial repayment of the Working Capital Consortium Loan,
4. General corporate purposes.

 

Competitive Strengths:

1. Well Established Brands Targeting a Range of Consumer Groups
2. Integrated Business Model
3. Diversified Product Portfolio and Customer Base
4. Growing its Pan-India Distribution Network and providing opportunity to grow at higher rate
5. Established Track Record of Growth and Financial Performance
6. Experienced Senior Management and strong corporate governance.

 

The IPO with a price band of 220-227 is pretty expensive compared to its direct competitors, but the company is poised to grow at a healthy rate, investors can subscribe to the issue with a medium to long term perspective.

 

To get more Support and Resistance levels of the share please visit Nifty Forecast

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