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Parag Milk Foods Ltd.

BSE: 539889 Sector: Agri and agri inputs
NSE: PARAGMILK ISIN Code: INE883N01014
BSE 00:00 | 07 Aug 92.55 2.45
(2.72%)
OPEN

91.70

HIGH

95.10

LOW

90.65

NSE 00:00 | 07 Aug 92.65 2.55
(2.83%)
OPEN

91.30

HIGH

95.40

LOW

90.55

OPEN 91.70
PREVIOUS CLOSE 90.10
VOLUME 61599
52-Week high 203.00
52-Week low 48.50
P/E 8.59
Mkt Cap.(Rs cr) 778
Buy Price 92.55
Buy Qty 2525.00
Sell Price 94.00
Sell Qty 200.00
OPEN 91.70
CLOSE 90.10
VOLUME 61599
52-Week high 203.00
52-Week low 48.50
P/E 8.59
Mkt Cap.(Rs cr) 778
Buy Price 92.55
Buy Qty 2525.00
Sell Price 94.00
Sell Qty 200.00

Parag Milk Foods Ltd. (PARAGMILK) - Chairman Speech

Company chairman speech

Dear Shareholders

I am extremely pleased to present to you our Annual Report for FY19 as it showcasesthe turn our growth story has taken. Today we are the strong FMCG dairy player that wehad set out to be the year before - as talked about in ‘The Goodness Story' of FY18.We have achieved our goal on the back of an expansive and innovative product portfolio andseveral strong brands along with a balanced manufacturing footprint and a growingcustomer reach.

Our strategic decision to drive consumer centricity into every aspect of our businessfrom product development to manufacturing and even to marketing and distribution hasdelivered solid gains. Our consumers have appreciated the agility with which we havefine-tuned our offerings and rewarded us with their trust.

This motivates us to reach our products to a wider customer base enabling more peopleto embrace goodness and health through the nutritive value our products offer. This desireis at the very heart of our next phase of growth that is ‘All about you.

All around you'. We see ourselves connected directly to our consumers by beingpresent in their routines as well as special occasions across distinctions of agecuisines regional preferences lifestyles and more.

FY19 has been great for us. We leveraged our strong brands and deep category expertiseand grew our distribution might to achieve sales growth of 23% and full-year revenue ofINR 2396 Crore. Sales volume was up with the largest proportion coming from our consumerbusiness in key categories such as ghee cheese paneer and curd. The numbers continue tofavour our FMCG thrust allowing us to stay true to our Vision 2020: to achieve a revenueof INR 2700 - 3000 Crore to maintain healthy EBITDA margins at 11-12% and to grow ourROCE to 18-20%.

India's FMCG industry valued at USD 390 Billion in 2018 is set to grow at 11.3% CAGRmore than double the pace of growth of the USD 10621 Billion worth global FMCG industrygrowing at 5.4% CAGR.

In the rapidly growing Indian FMCG industry the Food & Beverages (F&B) segmentis the largest in size at 89.4% of the market. India is the largest producer and consumerof dairy products in the world with a rapidly growing economy where the F&B industryis one of the fastest growing segments.

Thus the F&B sector promises a whole range of opportunities where companies withcapacities and innovative value-added products are best positioned to grow and createlong-term stakeholder value. Moreover value-added dairy products occupy a prominentplace with Indian consumers becoming increasingly health conscious and open to spendingas well as experiencing global cuisines. Busy modern lifestyles are accelerating thischange driving consumers to adopt value-added products. We are leading this segmentthrough premiumisation of our offerings allowing us to make value additions that helpenhance our consumers' lifestyles. Our fully integrated value chain is a major strength inthis regard.

We have built this growth on the strength of our well-established brands‘Gowardhan' ‘Go' and ‘Pride of Cows' well trusted for quality as theirbrand promise. We are the second largest cheese player in India; we have pioneered aninnovation to extend the shelf life of paneer to 75 days while maintaining its freshnessand taste; and we have customised Gowardhan Ghee to suit the tastes of our consumers inthe South with the newly launched SWARNA. We have ventured into the health and nutritioncategory with protein powder supplements and whey protein to help ensure a complete diet.Go Protein Power is a protein-based consumer product for mass consumption. On the otherhand whey protein along with its variants under brand Avvatar is a 100% ‘Made inIndia' offering that is also 100% vegetarian. It is certified by a WADA- approved lab inthe UK Informed Sport making it the perfect product for athletes.

The year also witnessed the addition of a manufacturing facility in Sonipat Haryanaaimed at expanding our reach in North and North-East India. This was accompanied byexpansion of our distribution infrastructure growing the number of our retail outlets to3.5 Lakh in FY19 from 2.5 Lakh outlets in FY18.

We have simultaneously continued to strengthen our partnership with farmer communities.We proactively supported Maharashtra's farmer community facing pressure due to milk pricevolatility. We are using insights from the research and development on our BhagyalaxmiDairy Farms to educate them about the best practices in livestock management.

Our teams at PMFL are extremely driven to ensure that our consumers experience the bestof taste health and quality day after day with ease and delight. As we integrate ourbrands further into our consumers' way of life I acknowledge our people's untiringefforts towards driving this transformation and appreciate our Board of Directors andShareholders for their unflinching support.

Regards

Devendra Shah

Chairman