Sheetal Cool Products Limited

This is my first thread on the Forum. I would appreciate the feedback of senior people and would also invite fellow members to research more on this company.
I am grateful to @Vivek_6954 as I came to know about this company through the thread Vivek Gautam Portfolio. Also, the scuttlebutt done by @DrArvind gave me the conviction to read more more about the company and it’s history.

About the Company and Business

The Promoter, Sanjaybhai D. Bhuva commenced the business of production of different types of Ice-cream, Mango Shake, Lassi & milk product etc. under a sole proprietorship M/s. Shree Shital Industries in the year 2000. Subsequently, sole proprietorship was converted into a partnership firm under the name M/s. Shree Shital Industries, pursuant to partnership deed dated June 17, 2013. Further, the name of the partnership firm was changed to Shital Cool Products on
September 11, 2013. Shital Cool Products was thereafter converted from a partnership firm to a Private Limited Company under Part IX of the Companies Act, 1956 with the name of Sheetal Cool Products Private Limited and received a certificate of incorporation from the Registrar of Companies, Gujarat, Dadra and Nagar Havelli on October 14, 2013. The Company was subsequently converted into a public limited Company pursuant to special resolution passed at the Extra-ordinary General Meeting of The Company held on July 24, 2017 and the name of The Company was changed to Sheetal Cool Products Limited. A fresh certificate of incorporation consequent upon conversion to public limited Company was issued by the Assistant Registrar of Companies, Ahmedabad dated August 10, 2017.

The Company is currently involved in producing and processing of milk and milk products, snacks and bakery items. The diversified product portfolio enables them to cater to a wide range of taste preferences and consumer segments, including adults and children. They sell the products under the brand “Sheetal” to a number of distributors and super stockists. It also has a franchise model to increase the visibility of our Company. Company has seen strong growth under the vision, leadership and guidance of our promoters, Bhupatbhai D. Bhuva, Dinesh Kumar D. Bhuva, Sanjay D. Bhuva. They have good industrial knowledge and experience, which enable us to carry the processing in an efficient manner.

Currently, the company has a manufacturing unit spread over an area admeasuring around 5314.66 square meters (approximately) at Amreli, Gujarat and the registered office is also situated at the same location. The unit is well equipped with wide range of machineries and other handling equipment to facilitate smooth manufacturing process. As on date of this Draft Prospectus, the Company has employed 22 employees (including skilled, semi-skilled) and 275 personnel on contract basis. It imparts continuous training to the employees, which helps the organization stay abreast of the rapidly changing preferences and taste of consumers. The company is ISO 22000:2005 & ISO 9001:2015 certified in respect of manufacture of Ice-cream, milk & milk products, mango ras, lassi, curd, flavoured milk, masko, wafers, namkeen, fryums and bakery products. The products undergo a quality check, to maintain precision in the results.

The restated total income for the Fiscal ended March 31, 2015, 2016 and 2017 was Rs. 4,490.40 Lakhs, Rs. 12,527.96 Lakhs and Rs. 15,462.88 Lakhs. The restated profit after tax for the Fiscal ended March 31, 2015, 2016 and 2017 was Rs.12.85 Lakhs, Rs. 196.16 Lakhs and Rs.205.85 Lakhs.

Purpose Location
Registered office GIDC Plot No.78,79 &80, Amreli, Gujarat-365601
Manufacturing Unit GIDC Plot No. 75, 76, 77, 78, 79 & 80, Amreli, Gujarat-365601

Wide range of products as mentioned below:
• Milk and Milk product: Products comprises of ice cream, pasteurized milk, flavTheed milk, yoghurt, lassi, chaas, sweets and many more.
• Snacks: Snacks portfolio of products comprises of potato chips, banana chips, extruded snacks (fryums), other namkeen including bhujia, salted peanuts, salted pulses and many more.
• Bakery: Bakery portfolio of products comprises of variety of breads, pav, khari, cake and many more.

(Major revenue coming from Milk and Milk products. Current margins are low, EBIT Margins for Namkeen and Fryms ~5%, for Milk and Milk products ~2.5%)

P&L statement

Cash Flows


Balance Sheet

Net block is increasing pretty fast, which suggests that company is continuously increasing its capacity.

Objects of the Issue – Purchase of additional plant and machinery is the key object

Assuming all these plants and machinery goes to net block, the net block is going to increase by 40%

Company is expecting ~3X jump in receivables (2018 compared to 2017). This directionally suggests that company is planning siginicant jump in turnover.

Capacity Expansion and Utilisation plans

Shareholding pattern after IPO – Promoter holding just marginally above 50% post IPO

The company seems to be providing quality and packaging at par with companies like Vadilal, but at a cheaper price.

Good feedback on promoters- going by some scuttlebutt done by @DrArvind

Not much reviews about ice-cream available online. But one-of the parlors on Zomato had pretty happy customers

Valuation compared to peers

With net profit of 2.06 crores, and current EPS of 2.06 as well, company is trading at a PE of about 60. If you look at P/S, it is available at a P/S ratio of .86

The company has witnessed good capacity utilization in the past and should do good with positive rural consumption story. Company is also looking to launch premium products and expand beyond to more markets.
It is looking to double it’s ice-cream capacity by 2020 and triple the namkeen+fryms capacity to 3 times.
The increase in capacity should aid in margin expansion.

My understanding of positives/negatives
• Hardworking 1st gen promoters
• Cheaper compared to peer looking at P/S (0.86)
• Focusing on rural markets – Rural consumption tailwinds
• Summer season to kick-off
• Expanding product portfolio – getting into snacks, premium ice creams
• Good customer reviews – (though limited scuttlebutt info)
• Low margins, (new plant) capacity increase should aid margin expansion

• Pricing of products is lower compared to established players – lack of pricing power, one of the reason of low margins
• Debt on higher side (13.7 crore debt – 9.7 cr long term, 3.9 cr short term). D/E of 1.67
• High competition in ice cream business
• SME liquidity issues

Discolsure: Invested and looking to add more


Scpl promoters are truly first gen self made workaholic entrepreneurs starting in a humble manner with a pan shop.

In investing 90% bet is on promoters and rest on sector. On both these criteria SCPL seems well qualified. SCPL promoters are true workaholics working in their factories till 12 in night. Profitability ratios can only improve in future . Opp size is big and increasing. Scuttlebutt from likes of dr Arvind is amazing.

I heard some big names with good reputation for finding quality smallcaps in consumption space which later turn into midcaps are liking the SCPL.Only concern is inability to get big blocks.

Disl- Invested in it since last few months as disclosed in my thread earlier.


Hey @Chirag2015,

Thanks for starting this thread. I have been studying this Company as well.

@DrArvind thanks for the scuttlebutt. Heartening to know that the promoters are hardworking.

One thing that concerns me is that the company doesnt seem to be focussing much on brand building. Their advt expenses have been really low. Is this really a point of concern at this point for a growing company. what do you guys think.


I think marketing activities is limited to regional levels right now since the company is focussed on Gujarat, Maharashtra and Rajasthan so far. It is using advertising mediums which are not very expensive but do a good job at getting local attention.

This is mentioned in their DRHP

I think once they grow in size and increase their market presence, their marketing spend would also increase. Also, the company has been built grounds up with limited resources… now with IPO money, management should have more advertising muscle going forward.

I was able to find out some TV commercials on youtube, but again, these would be regional in nature.


Please see the heading Activity after IPO on the website . Real progress happening on the ground.

Any idea why entire promoter holding might be pledged?

Have started seeing its products in peripheral areas of Pune. They are selling well as per the retailer and also could see that most of the ice cream wrappers in the bin or lying around were of Sheetal and couple of their prods sold out (this is obviously just 1 retail shop and can be exception). Retailer told me that they get 1 rs on a 10 rs product of Sheetal which is higher than what they get on other branded prods. He also said distributor might be making 8% odd. (Personally I don’t have much idea about margins etc in this industry).

Tried all prods on my own too. All very attractively priced as compared to its branded competitors and at par quality if not better.

EDIT- have been trying to find out more and came to know that retailer margin given to me above in all probability might not be correct and might be much higher infact. Maybe the retailer wasn’t comfortable disclosing his margins.
Also promoter holding is locked in and not pledged.

Discl: Invested. Initiated position in last 30 days. Have vested interests and views maybe biased. This is not a recommendation to buy or sell. I am not a SEBI registered research analyst. Please do your own due diligence before investing. I may buy more or sell (fully/partially) at anytime without posting on this forum.


Not much reviews about ice-cream available online. But one-of the parlors on Zomato had pretty happy customers

This is different Sheetal dairy icecream the one which is listed is Sheetal Cool Products and they have Smiley Parlours

Capturing my conversation with the Distributor and Super Stockist below. Posed as somebody who is interested in taking distributorship for Nashik and hence trying to find out few details.

Had taken cell number of the Distributor from retailer. Called up the Distributor but his wife attended the call as her husband was out for delivery. She did help with few answers and cell numbers of Super Stockist and Sales Executive of Sheetal Cool Products. Later also spoke to the Super Stockist and he helped me with the number of Area Sales Manager of Sheetal Cool Products. Haven’t spoken to the employees of Sheetal as yet and below points are only on the basis of conversation with Distributor’s Wife and Super Stockist.

Demand - Retailer had earlier told that butter scotch cone in huge demand and shortage of it but delivery not coming.
Confirmed by other 2 that yes butter scotch highest selling product. Delivery not coming to retailers as can’t deliver just butter scotch and from company point of view also need to ensure off take of other products. Its not that other products don’t sell much, other products also are selling well but retailers calling and asking for butter scotch to be delivered as butter scotch gets over fast. He also said that they had kind of underestimated the demand and weren’t expecting products to be such a success, but now they know it hence would order accordingly and orders would increase this year onwards.

Margins - Super Stockist said Retailer Margins vary from 20% to 40-50% I said how come as it sounds high. He said that Distributor margins itself around 11%. And said that Retailer on an average makes 30%-33%. And that’s why retailers want Sheetal’s products and themselves call and ask for it as product selling well and also margins high. As I said earlier I don’t have much idea about margins in this industry but started reading about it and have read that Amul gives 20% margins on its bars and in Amul parlours on scoops it can go as high as 50%, but scoops are another discussion and not in question here. So basically retailer margin prima facie seems to be decently higher than competitors.

No Credit Period - No credit period given by company. Distributor pays advance while ordering. Takes delivery and pays the rest next day.

Target Market - I asked why can I see the products only in peripheral areas of Pune and not in main areas like Aundh, etc,., - He said first let the product get accepted and become famous and then it would be made available in main areas. Not sure if he said this for the sake of it. It might be conscious strategy of the company to target peripheral areas, but not sure.

Other Points -

  1. Operations started in Pune in 2017.
  2. Nashik Super Stockist in the process of being appointed.
  3. Company takes deposit (can’t remember if it is refundable fully or partially but maybe not refundable) from Distributors and Super Stockists. This deposit varies from 50k to 1.5 lacs. Was also told by Distributor that initially it was 50k but now increased to 1 lac.
  4. Company helps Distributors get equipment like deep freezer at a discount but investment obviously has to be done by distributors.
  5. Company is expanding distribution network.

Few other things that I came to know while doing some reading:

  1. India has the fastest growing ice cream market in the world, growing at 13%.
  2. Pune was or is Amul’s largest market for ice creams. Infact Amul wasn’t able to meet the demand in Pune and decided to set up a plant near Pune couple of years ago to meet the demand.
  3. Globally Avg per capita ice cream consumption is 2 litres whereas India’s per capita ice cream consumption is 300-400 ml.
  4. In 2017 first half Ice cream market in India was estimated to be over INR 4,000 crores, and was growing at a rate of 15-20% year-on-year. It is projected that by 2019, the market will reach around INR 6,198 crores.

Looks like there is enough place for smaller players to enter and grow if they get their strategies right.

Sheetal seems to be following strategy of trying to expand its reach first and increasing volumes and then some time in future will think of increasing margins.

Its an SME and hence comes with lot of risks. Needs to be monitored closely. I am still reading about this industry, will post more if come across interesting stuff. Will also try and speak to the employees later and post anything worth mentioning.

Note: Please take everything written above with a pinch of salt as Distributor and Super Stockist might not have shared correct information.

Discl: Invested. Initiated position in last 30 days. Have vested interests and views maybe biased. This is not a recommendation to buy or sell. I am not a SEBI registered research analyst. Please do your own due diligence before investing. I may buy more or sell (fully/partially) at anytime without posting on this forum.


Results are out.

Annual sales went up by 34%, PAT went up by 63%.Quarterly results not declared by management.Power & fuel cost went up disproportionately for last 6 months due to increase in no. of trucks for transportation of ice creams. As company continues to grow and increase geographical reach, this cost will grow much higher as % to sales.

Disclosure - interested, but not invested

Hi Vivekji,
What is your take on sheetal annual results?

Gud results…HY 18-19 results should be blockbuster as its a seasonal business…also the new plant shd start giving numbers as it wd be commissioned in May 18


Stay invested till it migrates to main board when the real returns will come.These FMCG branded plays will always remain expensive.Stock already in strong hands.

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what is the lot size in Sheetal ? Where can I check lot size ?

800 as per money control…just type in the company name in the search section and scroll down and you will find it

It’s 1600 per lot.


Lot size was revised recently to 800. Thanks!

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Any red flags in the results?

RECENT DEVELOPMENT : Company is shortlisted in Category ‘A’ and is eligible for supplying ‘SHEETAL’ Brand of ‘Ice Cream’ to all licensee operated catering units (Mobile/Static) over Western Railway.


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IT raids Sheetal ice cream factory in Amreli - Tv9 Gujarati

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I haven’t seen any updates about his raid. A y one has a view?

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