Prabhat Dairy (Prabhat) is rapidly advancing towards becoming a B2C player (targeting 50% revenue contribution by FY19 from ~28% in H1FY16), while continuing to grow its B2B business. The company’s 20 ton per day capacity cheese plant (third largest in the country) will drive growth in coming years. Initially, it is betting big on the Horeca (hotels, restaurants, catering) segment, which presents a huge conversion opportunity from unorganised to organised. One risk we envisage is likely increase in milk prices due to draught-like situation anticipated in Q4FY16 (to hit realisations). We believe Prabhat is well placed to milk growth in the organised dairy space (dairy space is expected to grow at faster growth in next 3 years as against 22% seen in past 5 years). It is nor rated.
Prabhat is targeting to bolster revenue contribution from the consumer segment to 40% by FY17. Dahi, UHT milk, paneer and cow ghee are the products that the company is focusing on currently. Going forward, cheese and shrikhand (to be launched in Q4FY16) will drive growth – cheese has the potential to contribute ~INR3bn at peak capacity utilisation.