Instead of assuming its best for a shareholder to directly ask the company and see what they say. Interesting to see if the company will stonewall the shareholder like they did to Fitch/Ind Ra.
Can any investor take this up with the mgmt?
Some additional info for the interested- Price to Free Cash Flow = -865.31
Pledged share % = 14.56%
Promoter holding = 45.96
[quote=âChetanpinto, post:127, topic:4163, full:trueâ]
Instead of assuming its best for a shareholder to directly ask the company and see what they say. Interesting to see if the company will stonewall the shareholder like they did to Fitch/Ind Ra.
yes that is very much true. For one thing I posted it too hurriedly, should have dug deeper.
Now I have found out that they are availing rating services of ICRA and last rating report is 4th July, 2018. This report mentions - âStatus of non-cooperation with previous CRA: The company has an outstanding rating of [IND-Ra] BBB+(Issuer not cooperating)/[IND-Ra] A2 (Issuer not cooperating) for Rs. 292.34 crore bank lines since September 2017.â ( Page No. 4 ).
Regarding promoter shareholding they have done some promoter re-classification on 14th May,2018.
Regarding your other points of concern, as I am done with all my queries I will contact the company and share details here, if any.
If my memory serves me right, there was an article by SMARTKARMA authored by (The famous) Nitin Mangal raising some major concerns regarding this company. Anyone has a link to the same?
I canât get the difference between A2 milk and regular milk. Also, I wanted to know if the âPRIDE OF COWSâ is A2 milk or regular milk with good contents?
Also, what are the benefit customers are getting from Milk? I mean which are the contents which are commencing a premium for milk?
The science of A2/A1 is not fully understood within the industry or consumer base. What we do know is that cows with A2 genetics have one amino acid different (the beta-casein protein BCM-7 to be exact) out of the 209 Beta-casein amino acids found in milk. Beta-casein makes up approximately 30% of cow milk proteins. There are approximately 2500 different proteins found in milk and each protein has a specific function. Itâs important to understand that most cows produce a mix of A1 and A2 Beta-casein. The science of how that one different amino acid affects human health is not fully understood. Once these delicate proteins are pasteurized, then they are altered from its natural state.
IMHO, given the recent research focus on the gut microbiome (and its role in neuro-degenerative diseases due to the vagus nerve and anti-inflammation) and the emphasis on having more fiber to feed the gut bacteria (I disagree since beta-hydroxy butyrate aka ketones can also feed the bacteria), one needs to revisit the need for pasteurization and homogenization of raw milk.
Another thing to ponder is probiotic curd or yogurt where they add additional or same bacterial strains which were lost to pasteurization.
Due to poor food safety and blatant irregularity we have in India, I think more than the type of milk itâs more important to get milk which is 1) adulteration free 2) contamination free. Automation that Parag Milk has setup at their Manchar plant and direct delivery of Milk (no distributors), ensures both of the above points.
Agreed⌠but I have seen few local players in Mumbai marketing their milk as A2 milk⌠So I just wanted to know if can this be a trend in near future for health concious players and whether Parag Milk supplies that milk or notâŚ
All desi breed Indian and African cows produce milk with A2 protein. European breeds produce with A1 protein. A2 is the milk produced in older cow breeds. A1 is produced by cows that had undergone genetic mutation hundreds of years ago.
In the last few decades, European breeds have come to dominate the dairy industry due to their high yield (but correspondingly, they consume more and are more expensive to maintain). Barring a few exceptions, US, Australia, New Zealand all of them are majorly European breeds of cows like Holstein. Operation Flood was launched in India to increase yield in Indian cows by cross breeding them with European breeds and downright import of European breeds as well. While this led to an increase in Indian milk production, the population of many pure Indian breeds reduced.
In the last 2 decades, studies in Australia, New Zealand and Russia showed that A2 milk was supposedly superior in health benefits when compared to A1 milk. Since then, many foreign brands started marketing A2 milk as a healthy alternative and are priced accordingly. Australian and NZ companies have put in efforts to maintain the purity of desi Indian cow breeds. Nowadays, a lot of Indian companies have popped up that supply milk, ghee produced by desi Indian cows and are priced exorbitantly.
âPride of cowsâ is produced by Swiss Holstein and Friesian cows. So its A1 milk. It is priced higher because it is pure cowâs milk while generally, we get buffalo milk mixed in as well.
Probably, the healthiest option is to buy desi cowâs milk directly from a reliable/trustworthy/kind cowherd. No antibiotics, No harmful medicines, non pasteurised, pasture raised and well looked after Desi Indian cowâs milk.
One of the reasons we have seen a strong private sector sourcing presence in Maharashtra has been so because the Anand pattern has not been successfully implemented in Maharashtra.
Note: This is from their red herring draft, which requires companies to legally state the risks. So it might not be as extreme as stated.
How can Parag ascertain a constant supply of milk for its scalability? It is impossible to start a sustainable dairy procurement from Gujarat (Amul) or Karnataka(Nadhini) where there is already an Anand pattern. Only way seems to be acquiring existing branded companies looking to sell. (Recently Danone) . What stops AMUL or say Hatsun or even local players from squeezing their supply going forward?
Cheese seems to form a large part of its revenue, but wonât it be difficult to compete against the likes of AMUL who have planned to double their capacity this year and have a further expansion in place?
16:00 onwards - R.S Sodhi Speaks On Amul's Market Share | Exclusive - YouTube
I think Parag milkfood USP is creation of brand in various milk product segment. Milk is in any case a commodity and over long term only branding can help sustain competative advantage. Once consumer food brand get established in mind of consumer firmly it is difficult to dislodge it. Though there is definetly some concern around corporate governance particularly after recent sell transaction of Prabhat dairy business structure.
I personally have been using Parag products for quite some time and I have been impressed by their day by day increase of productsâ variety in Big Bazaar below my office. Yes, they have a nice, innovative product mix.
But having a good brand presence may not lead to a sustainable, profitable growth always.
Again, the question is regarding the supply⌠If a more operationally efficient player like Hatsun(Already started covering Maharashtra) or an Anand pattern co-operative(AMUL already sourcing from Maharashtra) starts increasing their reach, farmers would definitely want to be associated with them if they are getting higher amount per litre. So how does Parag scale for the next 7-10 years?
If someone has some on-ground knowledge regarding dairy procurement in Maharashtra and especially Paragâs, please do give your inputs!
