Diff presentation 29 june 2013

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.

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 2.9 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.

THE PLAYERS
• Amul & Kwality Walls are the only pan India
players.
• Substantial number of regional players.
• Largest volume delivered by local & artisanal
players.

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

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.

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

First HACCP certified
ice cream plant in AP

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.

THE PRODUCTS
Impulse
Cups
Cones
Sticks
Novelty Packs
Carry Homes
Pre Filled Sundaes
Institutions Packs

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.

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.

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

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

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

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

THE SALES NETWORK
Strong Distribution
and dealer Network
is the result of
Lucrative Margin and
Return that brand
Jumani provides to
Them. It provides to
Them deep freezers
For storage of ice
Creams, display signs
Broads, pop
Promotional material,
Etc.

COMPETITORS IN
INDIA
• Amul(8)
• Quality Walls(7%)
• Vadilal(3%)
• Mother Dairy(2%)
• Cream Bell(1%)

COMPETITORS IN AP
Quality Walls (8%)
Amul (5%)
Scoops(4%)
Dinshaw(1.5%)
JUMANI (2%)

AWARDS &
ACCOLADES
• Most awarded ice cream company in 2010
• Brand Jumani won 6 out of 8 silver categories in
Great Indian Ice Cream Contest
• Sin spot has been Voted as the best ice cream
outlet by Times Food Guide in the region

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.

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.

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

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.

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

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

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

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.

Diff presentation 29 june 2013

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