Sheetal Cool products – Sheetal Cool Products Ltd, established in 2000, is a Gujarat based company engaged in the manufacture and processing of milk and dairy products, snacks and baked goods.Products range from ice cream, milk and dairy products, mango ras, lassi, curds, flavoured milk, masko, wafers, namkeen, fryums and bakery products.The company sells its products under the “Sheetal” brand.The company enters the following product series-1.Dairy – 145cr2.Snacks – 9.3cr Dairy – 1.Ice Cream – 1.45 million liters capacity – 86% utilization rate2.Mango ras – 45000 liter capacity – 66% utilization (unstable)3.Lassi – 5 million liters – 100% utilization4.Buttermilk – 1.8 million liters capacity – 97% utilization5.Milk – 13.5 million liters capacity – 95% utilization6.Masko – 6 million kg – Utilization – 90%7.Namkeen – 200,000 kg – Utilization – 110%8.Fryms – 800,000kg – Utilization – 90% Some details on current capacity details.The company plans to use the IPO proceeds to increase production capacity for some products.The increase in capacity has improved crude revenue visibility by about 25% for the Namkeen segment and about 35% for the dairy segment.There will also be good capacity additions in the coming years.Talking about 220cr earning potential for next 12 months.Mainly found in Gujarat and parts of Maharashtra and Rajasthan.Strengths – 7x EV/EBITDA for FMCG company. – Rural focused brand.Weakness – exists in only one state – Gujarat.(Company has taken steps to expand – now established in Maharashtra and Rajasthan) – Perishable product opportunity – Market size could be a big threat given the size of the company – Potential from big brands Competition (rural concerns should negate this) – in a country any natural disaster can have a big impact on them.Disclaimer: SME investments face the risk of illiquidity and information asymmetry.This is not a buy/sell recommendation.Please do your own due diligence before buying/selling this stock.
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Post time: Jan-18-2022
