Lecture Notes: Analysis of Parag Milk Foods Ltd.

Introduction

• Presenter: Harum
• Topic: Analysis of Parag Milk Foods Ltd., a company with market cap ~2,000 crore
• Focus:
  • Abundance model
  • Financials
  • Technical chart patterns
  • Future growth prospects
  • Challenges

Company Overview

• Established: 1992
• Operations: Processing, procurement, and marketing of liquid milk and milk products
• Brands: Gohan, Go, Pride of Cow, Topup, Aar, Slurp
• Products: Ghee, cheese, butter, yogurt, curd, UHT milk, flavored milk
• Processing Plants: Manchar, Palamar, Sonipal
• Market Position:
  • 35% market share in cheese
  • Leader in cow ghee market under Gohan brand with 20% share
• Innovations:
  • First Indian company to launch B2C whey protein (Aar)
  • Fresh paneer available within 75 days
  • Largest cheese plant in India (60 metric tons/day)
  • Automated dairy farm with 3,000 Holstein Friesian cows

Technological Innovation

• Farm-to-Home Milk Concept: Fully automated, no human contact
• USD Technology: European technology with minimal human intervention

Future Growth Prospects

• New processing units at Sony facility
• Expansion of yogurt facility
• Health and nutrition business to comprise 7% of portfolio
• Drive growth in cheese and whey businesses
• Import substitution opportunities
• Increase market size for GoDan, Gois, and Aar brands
• Triple distribution footprint by FY27

Challenges

• Strong competition for milk collection
• Price volatility in skim milk
• Impact of monsoons on cattle feed and milk production

Leadership

• CEO: Venkatram
  • Experience: 30+ years (Britannia, PepsiCo)
  • Education: PGDM from IIM Ahmedabad, Engineering from IIT Kanpur

Financial Overview

• Market Cap: 2,177 crore
• Stock PE Ratio: 21 (industry PE: 31)
• Returns:
  • ROC: 10.9%
  • ROE: 10.5%
• Debt Management:
  • Debt-to-equity ratio: 0.67
  • Significant reduction in debt since 2015
• Recent Performance:
  • Record quarterly revenue: 885 crore
  • Highest quarterly profit: 36 crore
  • TTM sales: 3,34 crore
  • TTM net profit: 102 crore

Ownership and Stock Performance

• Ownership: 64% held by "strong hands"
• Stock Patterns:
  • Support zone at ₹134
  • 52-week high of ₹260
  • Reverse head and shoulders pattern observed
  • Neckline at ₹258

Conclusion

• Emphasizes video is for educational purposes
• Encourages feedback and suggestions for future analysis