Prabhat Dairy eyes 50% business from B2C products by 2020

Company plans to add 1 lakh retail outlets in next 2 yrs

Hoping to increase its capacity utilisation in the coming years, Prabhat Dairy Ltd has said that it is expecting to draw 50 per cent of its business from B2C products by 2020. At present, the company draws 30 per cent of its business from the segement
 

Prabhat Dairy's B2C products include liquid milk, cheese, paneer, curd and the recently launched ice-cream which it sells through retail outlets and modern trade. However, as of now, 70 per cent of its business comes from B2B segment, which includes supply of products to players like Mondelez, Abbott, Parle, Nestle and Future Group, among others.

"Currently, our cheese plant is running at a 20 per cent capacity, though we are the third largest cheese manufacturer. We are expecting higher capacity utilisation of our products in the coming days where the share of value added products will continue to grow. Our aim is that by 2020, 50 per cent of our business should come from the B2C segment including products like milk, ghee, curd, paneer, cheese, and ice-cream," said Vivek Nirmal, joint managing director, Prabhat Dairy Ltd.

As part of its expansion plans, Prabhat Dairy is looking to market its products through 2,00,000 retail outlets in the next two years, up from 1,00,000 outlets right now.

At present, the company has a capacity utilisation of 60 per cent. The company intends to take this up to 85-90 per cent in next two years, said Nirmal.

While the company's standalone net profit for the fourth quarter fell by 25.34 per cent to Rs 4.30 crore in March due to rising milk prices, the same grew by 1.33 per cent on an annual basis to Rs 27.30 crore as against in FY16. Registering rapid growth in value added products, Prabhat Dairy posted a 102.85 per cent growth in its consolidated annual net profit at Rs 46.94 crore in FY17 as against Rs 23.14 crore in the repviuous financial year.

Moreover, the company registered a 29.04 per cent growth in its standalone total income in Q4 at Rs 333.96 crore, up from Rs 258.80 crore in the corresponding period last year. On the annual basis, the standalone total income of the company grew by 12.80 per cent to Rs 1148.27 crore in FY17, up from Rs 1017.96 crore in the same quarter last year.

Going forward, the company expects to realise returns on the Rs 250-crore investments made in the past three to four years.