About the company:
Dodla Dairy Limited, founded in 1995, is a South Indian integrated dairy firm that specializes in the sourcing, processing, distribution, and marketing of milk and other dairy products. It processes and sells milk, including standardized, toned, and double toned milk, as well as curd, butter, ghee, ice cream, and flavored milk, among other dairy products.
It primarily operates in India under the brand names “Dodla,” “Dodla Dairy,” and “KC+,” while serving the international market under the brand names “Dodla Dairy,” “Dairy Top,” and “Dodla+.” The company primarily serves the Indian market segments of Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and Maharashtra, as well as the international market segments of Uganda and Kenya.
| Headquarter | Hyderabad, Andhra Pradesh |
| Sector | FMCG Sector and Food Processing Industry. |
| Area of Operation | Telangana, Andhra Pradesh, Tamil Nadu and Maharashtra (National) Kenya, Uganda, Singapore (International) |
| CEO | Venkat Krishna Reddy Busireddy (Past 26 years). |
| Chairman | Sesha Reddy |
| Board of Committees | 7 Independent directors out of 13 members. |
Promoters & their shareholding pattern:
Promoters & their remuneration:
Subsidiaries:
• Dodla Holdings Pte Ltd. (Singapore)
• Lakeside Dairy Ltd. (Uganda):
The company offers a wide variety of milk products, including fresh milk, butter, mozzarella cheese, flavored milk, ice cream, and skimmed milk powder, ensuring that clients receive high-quality, ultra-heat-treated dairy products that are safe for human consumption.
• OrgaFeed Pvt Limited (Andhra Pradesh):
The business of OrgaFeed is to procure raw material, manufacture cattle feed and sell the same through their network of milk collection centres of 5740 in number.
Competitors:
- Amul
- Mother Dairy (North)
- Prabhat Dairy
- Parag Milk Foods (South)
Shareholding pattern:
Big Investors:
• SBI Group with 7.37%
• International Finance Corporation 4.59%
• Birla Group with 1.56%
Foreign Operation:
•Dairy production in the African region plays a very vital role in the regions economic and sustainable development.
•The production is huge in the region. Local milk production in West Africa has already risen by 50% between 2000 and 2016 to about 4 billion liters in 2019.
•Local production does not yet have the capacity to meet 100% of demands in the sector. Only 50% of consumption comes from local production, and imported milk powder helps meet the remaining needs.
•Despite substantial growth in recent years, the dairy sector in Africa faces major drawbacks such as high production costs and low yields. This is due to the lack of infrastructure and appropriate equipment in the production process.
| Singapore | •Wholly owned subsidiary with the name of Dodla Holdings Pte Ltd. •Incorporated on June 2014 •First overseas expansion |
| Uganda | •Incorporated on July 2014 (Exactly after 1 month of singapore expansion) •Wholly owned subsidiary of Singapore firm which is named Lakeside Dairy Ltd. •Aquired the business of Hillside Dairy & Agriculture Ltd. •Have local processing unit at Mbarara |
| Kenya | •Incorporated on May 2017 •Purely engaged in the trading of dairy products in Kenya |
IPO Details:
| Details | •The company was listed in the month of June 2021. •The upper price band was Rs 428 •The promoters holding declined from 68.52% to 64.17%. (Offer for sale) •The company had a strong subscription demand. |
| Subscription details | Qualified Institutions- 84.88 times NIIs- 73.26 times Retail- 11.34 times Total- 45.62 times |
Profit and Loss Statement:
Standalone P&L
| Mar-16 | Mar-17 | Mar-18 | Mar-19 | Mar-20 | Mar-21 | |
| Revenue from Operations | 1,182 | 1,410 | 1,537 | 1,598 | 1,988 | 1,837 |
| Expenses | 1,087 | 1,324 | 1,432 | 1,482 | 1,888 | 1,619 |
| Operating Profit | 95 | 86 | 105 | 116 | 99 | 218 |
| Profit before tax | 74 | 68 | 75 | 79 | 48 | 165 |
| Net Profit | 36 | 46 | 51 | 52 | 28 | 108 |
| EPS in Rs | 108.65 | 140.1 | 154.42 | 9.41 | 5.11 | 18.58 |
Standalone Balance Sheet
| Mar-16 | Mar-17 | Mar-18 | Mar-19 | Mar-20 | Mar-21 | Sep-21 | |
| Equity Capital | 3 | 3 | 3 | 56 | 56 | 58 | 59 |
| Reserves | 241 | 287 | 340 | 341 | 341 | 546 | 647 |
| Borrowings | 109 | 136 | 126 | 158 | 160 | 98 | 13 |
| Total Liabilities | 436 | 531 | 601 | 723 | 733 | 903 | 939 |
| Fixed Assets | 160 | 232 | 296 | 461 | 482 | 492 | 495 |
| Investments | 95 | 109 | 109 | 67 | 55 | 104 | 204 |
| Other Assets | 145 | 159 | 181 | 185 | 187 | 298 | 233 |
| Cash Equivalents | 9 | 7 | 11 | 10 | 27 | 160 | 83 |
| Loans n Advances | 5 | 33 | 15 | 36 | 23 | 31 | 34 |
| Total Assets | 436 | 531 | 601 | 723 | 733 | 903 | 939 |
Standalone Cash Flow
| Mar-16 | Mar-17 | Mar-18 | Mar-19 | Mar-20 | Mar-21 | |
| Cash from Operating Activity | 131 | 59 | 83 | 118 | 103 | 217 |
| Profit from operations | 100 | 83 | 106 | 120 | 101 | 219 |
| Inventory | 53 | 6 | -47 | 17 | 6 | 26 |
| Payables | 0 | 9 | 16 | 12 | 9 | 18 |
| Working capital changes | 64 | -8 | -8 | 16 | 5 | 48 |
| Direct taxes | -34 | -22 | -16 | -19 | -2 | -50 |
| Cash from Investing Activity | -96 | -79 | -61 | -140 | -45 | -166 |
| Fixed assets purchased | -90 | -73 | -67 | -90 | -68 | -53 |
| Investments purchased | -35 | -26 | 0 | -143 | -74 | -55 |
| Other investing items | 1 | 0 | 0 | -96 | 0 | -72 |
| Cash from Financing Activity | -37 | 19 | -40 | 62 | -26 | 11 |
| Proceeds from shares | 0 | 0 | 0 | 0 | 0 | 100 |
| Proceeds from borrowings | 30 | 34 | 0 | 105 | 25 | 0 |
| Repayment of borrowings | -5 | -5 | -32 | -33 | -16 | -63 |
| Net Cash Flow | -2 | -1 | -18 | 39 | 33 | 61 |
Financial Ratios:
Stock Price:
| 1. Current Price | Rs 560 |
| 2. Market Cap | Rs 3,330 Cr |
| 3. Yearly fluctuation | Rs 428-674 |
P/E Ratio:
(It indicates the market value of stock as compared to the company’s earnings)
| 1. Company’s ratio | 34.3 |
| 2. Industry | 74 |
| 3. Prabhat Dairy (973cr mark cap) | -8.48 |
| 4. Parag Milk Foods (1134cr mark cap) | 27.1 |
ROCE Ratio:
(It basically indicates the profit company is making from its total capital invested)
| 1. Company’s ratio | 28.4% |
| 2. Industry | – |
| 3. Prabhat Dairy (973cr mark cap) | -21.70% |
| 4. Parag Milk Foods (1134cr mark cap) | 6.73% |
ROE Ratio:
(It basically indicates the profit company is making from its equity invested)
| 1. Company’s ratio | 21.70% |
| 2. Industry | – |
| 3. Prabhat Dairy (973cr mar cap) | -23.30% |
| 4. Parag Milk Foods (1134cr mark cap) | 2.38% |
Positives aspects:
- Company has reduced debt.
- Company has delivered good operating profit growth of 25% CAGR over last 5 years.
- Large product portfolio.
- Leading player in southern region.
- ICRA upgraded its long term rating AA- from A+.
- The management team is very well experienced and is in this business in the last 25+ years.
- Generated huge cash flow from operating activity.
- There has been a stable growth over the years.
- Supported by Big Investors and had a impressive IPO subscription.
- 50% of the directors are independent.
- Increase in cash equivalent.
- Good PE ratio when compared to the industry.
- Making good when compared to its peers. ROE & ROCE are indicative of this.
Negative aspects:
- The company has delivered a poor sales growth of 9% over past five years.
- Unclear International Operation.
- Major dip in this years sales.
- One issue is that it has a limited area of operation which majorly includes southern region but slowly trying to spread its business towards East region.
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