Kwality Ltd is one of the largest processors and handlers of dairy products in the private sector in India, and sells its products under the Dairy Best brand. The company manufactures various dairy products including milk, milk powder, flavoured milk, ghee, butter, instant dairy creamer, dairy mix, ice cream and cheese, among others. With six manufacturing units and an extensive network of milk chilling centres located in Punjab, Rajasthan, UP and Haryana, the company enjoys a wide presence in northern India.
Gaining with Kwality
Expanding reach and innovation in dairy products is helping Kwality become one of the major players in FMCG sector
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Over the next three years, Kwality plans to spend Rs.300 crore- Rs.500 crore on capacity expansion and retail presence. At present, the company’s milk processing plants have the capacity to handle around 3 million litres of milk per day, which the management hopes to double in the next 3-5 years. Kwality has a strong presence in the institutional segment and supplies to FMCG brands, government organisations, religious institutions and retail chains, which accounts for 75 per cent of its revenues. It has plans to enter the direct-to-consumer business to reduce its dependence on institutional players.
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Slick performance
For FY14, the company reported a net profit of Rs.144.93 crore on revenue of Rs.5, 015.14 crore, on a consolidated basis. Company’s profit after
tax (PAT) registered a compound annual growth rate of 47 per cent over FY11-14. Kwality’s net profit for the quarter ended December 2014 stood at Rs.36.12 crore, registering 12 per cent standalone growth over Rs.32.13 crore net profits in the year ago period. With the ongoing business transformation exercise, the company’s sales growth was 12.7 per cent in the quarter ended December 2014 over the corresponding quarter of the previous year. Starting January 2014, the company has delivered a return of 39 per cent till date.
To ensure continuous gains, the company’s focus is on delivering quality products to suit the changing lifestyles of consumers, for which it is undertaking extensive research and development. Further, the plan to increase its footprint will only work towards capturing a higher market share, which augurs well for investors looking to benefit from this opportunity.
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