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Diff presentation 30 june 2013 1a
1.
2. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE PRODUCT • Ice Cream is a product that is enjoyed
across the world without the barriers of food
habits, cultures, age & gender.
• Ice Creams have traditionally been part of
popular culture for every celebratory
occasion whatever the size.
• Ice Creams are highly impulse driven and
are available across counters varying from
Grocery stores to exclusive parlors.
3. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE INDUSTRY
• Rapidly growing industry growing at 20% per
annum across the country.
• Indian ice cream market is worth Rs. 3500
crores (750 Million USD Approx) in terms of
retail value
• Annual national consumption pegged at 300
million liters in terms of volume.
• Per capita consumption of ice cream in India
is 0.3 liters, as against 29 liters global
average leaving tremendous scope for
growth for 2 or 3 decades.
• Maximum growth is in B & C tier towns.
• Virtual non availability in 50% of the country.
4. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE PLAYERS
• Amul & Kwality Walls are the only pan India
players.
• Substantial number of regional players.
• Largest volume delivered by local & artisanal
players.
5. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE COMPANY
• Dairy Ice Creams & Frozen Foods (P) Ltd or
DIFF was incorporated in the year 1980.
• Produces an wide array of Ice Creams &
Frozen Desserts.
• First HACCP certified ice cream plant in AP
• New facility of DIFF incorporates the latest in
international food safety standards.
• New facility has gone live from december
2011
6. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE VISION & MISSION
• VISION: Delivering the experience of
Pure Pleasure
• MISSION: To create Ice Creams that
deliver pure pleasure in absolutely
safe, state of art facilities that meet the
highest standards and deliver the
experience of unadulterated
happiness.
7. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE MARKET
• Multiple brands of DIFF
• Diffys
• Exclusia
• Jumani
• Halka
• Private Label partnerships of DIFF
• Metro
• DIFF operates in all segments of the
industry.
• Retail
• Institutional
• Catering
• Ice Cream Parlors
• Mobile Vending Operations
• Super Markets
9. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE TEAM
• AJAY KUMAR VADHI, MD
• He is a post graduate and started his career with Cadbury
India Ltd in 1989.
• Worked with Uni Lever Group in the Ice Creams divisions
till 1996. Quit to start his own ice cream business. Bought
over the current company in 2002.
• Sheik Mujibulla, Head of Quality Assurance
• Post Graduate in microbiology with about eight years
experience in ice cream industry in India and Saudi Arabia
• M. NAVEEN, Production Manager
• He is a micro biologist by profession.
• Has had extensive experience in productionand research
and development of new products and recipes.
• VENU KUMAR, Head – Distribution & Logistics
• Has a 10 year experience in the industry.
• currently responsible for overall primary distribution and
services of the company.
• SRIDHAR, Sales Head
• Has about 9 years experience in the FMCG industry.
• Currently heads the sales network and has the overall
responsibility of increasing the footprint of the brand in the
market.
12. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
Diffys
• Currently our largest selling brand.
• The most visible brand in the modern
trade.
• Currently sold in major parts of Andhra
Pradesh.
• Current outlet base of 750.
• The entire retail market is being
serviced by a network of distributors.
• Extremely strong institutional presence.
13. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE EXOTICA /
EXCULSIA
• Exotica is the first super premium
Indian brand
• Naturally Flavored without artificial
ingredients like
• Colors & flavors
• Product designed in line with
global standards
• Positioned to deliver absolute
pleasure
• Natural vanilla – Voted India’s
best premium ice cream
• Pa n India roll out in next 3 years
• Currently being rebranded as
Exclusia for expansion into pan
India markets.
14. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE SINSPOT
• SINSPOT – a successful
franchisee of exotica launched
• 3 Sinspots activated in
Hyderabad in the most
premium locations
• Awarded the best Ice Cream
store in the region by times
Food Guide
• Pan India roll out in next 3
years
15. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE HALKA • First successful commercial branded
diabetic friendly ice creams.
•It is available through retail chain as well as
super markets.
•Available in two variants.
•Sugar Free.
•Low Fat.
•Opportunity to expand the portfolio further
with more specialized health friendly ice
creams
16. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE JUMANI IGLOO
• Exclusive uniquely designed mobile vending
units.
• Highly popular near tourist locations as well
as well as near kid zones.
• Creates a massive market for impulse buying.
• Most effective medium of brand building and
also serves as reminder advertising
17. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
THE JUST CHILL
Soon to be launched
chain of exclusive Ice
Cream stores for brand
Jumani.
Standardized exterior
and parlor ambience.
20 to 25 stores planned
for this year
18. THE SALES NETWORK
Strong distribution and
dealer network is the result
of lucrative margin and
return that brand Diffys
provides to them. It
provides to them deep
freezers for storage of ice
creams, display signs
broads, POP promotional
20. COMPETITORS IN AP
• Quality Walls (8%)
• Amul (5%)
• Scoops(4%)
• Dinshaw(1.5%)
• Diffys / Jumani (2%)
21. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
AWARDS &
ACCOLADES
• Most awarded ice cream company
in 2010.
• Brand Diffys won 6 out of 8 silver
categories in Great Indian Ice Cream
Contest
• Sinspot has been voted as the best
ice cream outlet by Times Food Guide
in the region.
24. Advantages of proposed acquisition of Western
region dominant ice cream player
• Direct access to major and growth market of
western India comprising of Goa, Northern and
Coastal Karnataka, Central and Western
Maharashtra
• Adding around 8 crs to the top line of the
company and can subsequently be scale upto
20 Crs in two years down the line.
• Launch pad for Exclusia in premium market of
western region.
• Net work of more than 1500 dealers
• State of art of machinery, logistic and
distribution infrastructure
• The proposed acquisition will help in reducing
the operating cost by shifting the manufacturing
process to Hyderabad and enhancing the
capacity to 2500 Liters per hour from the current
1500 Liters per hour.
25. Expansion of market and distribution network
• Penetrating into newer territories
of Andhra Pradesh, Tamil Nadu
and Southern Karnataka.
• Increasing dealer network to 4000
from existing 1000 dealers /
freezers.
• Launch of Exclusia premium ice-
cream across Pan India.
• Targeting the burgeoning retail
segment and hospitality sector.
• Increase in parlor outlet in
premium segment from 2 to 50.
• Increase in mobile vending
operation from 120 to 400.
26. Dairy Ice Creams & Frozen Foods (P) Ltd - Confidential
Strengths Weaknesses
• Quality & Consistency.
• State of Art production facilities among
the top 3 in the country .
• Product Innovation.
• Good dealer relationship; very low
attrition.
• Virtual monopoly among high end
hospitality groups.
• Retail width is not at a desired level
consequently the impulse sale has been
less then desired. Slow to take off in the
parlor segment
• Public perception that Diffys is a premium
brand whereas it is targeted for the mass
segment.
Threats Opportunities
• A very fragmented industry Very large
number of players .
• High food prices.
• Increase in quality awareness levels in
the consuming class leading to creation
of brand loyalty towards quality brands
Consolidation of the retail industry.
• Success of Exotica can be replicated
across the country.
27. THE ROAD MAP
• Focus on complete regional coverage for
brand Diffys by rapid retail expansion that
is currently on and proposed acquisition.
• Pan India spread of Exotica
• Product Segmentation by sub-branding
“HALKA”. Ex.: Low Fat, Diabetic friendly
and Probiotic, etc.
• Launch of “Just Chill” ice cream parlors.
• Expansion of mobile vending operations.
28. TOPLINES OF THE PROJECT
Rs in Lakhs
0
1000
2000
3000
4000
2010 2011 2012 2013 2014 2015 2016 2017 2018
3350
3190
2900
2200
1500
651644625
348
29. EBITDA OF THE PROJECT
Rs in Lakhs61.41
124.58
176.3
217.98
415.01
543.26
673.15
722.66
746.21
0
100
200
300
400
500
600
700
800
EDIDTA
30. PAT OF THE PROJECT
Rs in lakhs
14.31
22.46
12.18
18.98
167.59
288.06
455.23
541.92
592.73
0
100
200
300
400
500
600
700
201020112012201320142015201620172018
PAT
31. Value of Operating Equity
Present value of
unlevered firm
Rs. 4173.50 Lakhs
Present value of tax
shield
Nil
Present value of market
value of debt
Rs. 1277.83 Lakhs
Value of firm
Rs. 4173.50Lakhs
Value of Operating Equity = 4173.50 – 1277.83
= Rs. 2895.68 Lakhs
No. of Equity Shares = 67.11 Lakhs shares
Value of Each Equity share = Value of Operating Equity/ No of Equity Shares
= 2895.68 / 67.11
= Rs. 43.15
SHARE VALUATION
32. INVESTMENT MODE : Compulsory Convertible Debentures
A debenture is an instrument of debt executed by the company acknowledging its
obligation to repay the sum at a specified rate and also carrying an interest. It is one of
the methods of raising the loan capital of the company. The instruments will convert into
Equity Shares in the Company at an agreed Price, which shall not be less than DCF.
Security : 100% backed by the Value of the Amount Taken, till the Date of Conversion to
Equity shares
Interest : Till the instrument is converted 12% p.a.,
Tenure : 3-5 years as Debentures, there of converted to Equity.
EXIT OPTIONS :
Taking the Shares to the Recognized Stock Exchanges through the IPO Mode
Third Party Coming into the into the Shoe of Investor, by taking the Shares of the
Investor
Promoter Group Coming into the into the Shoe of Investor, by taking the Shares of the
Investor
Complete take over by the Investor, by giving an exit option to the current promoters.