A.R Dairy Food_r_09012013

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A.R Dairy Food Private Limited

Instrument Amounts (Rs. Crore) Rating action

Term Loan facilities 6.55 [ICRA]BB(stable) / assigned

Fund based facilities 7.70 [ICRA]BB(stable) / assignedNon - fund based facilities 1.10 [ICRA]A4 / assigned

ICRA has assigned a long-term rating of [ICRA]BB (pronounced ICRA double B) to the Rs.6.55 crore1

term loan facilities and the Rs. 7.70 crore fund based facilities of A.R Dairy Food Private Limited(AR

Dairy/ the Company). ICRA has also assigned short -term rating of [ICRA]A4 (pronounced ICRA Afour) to the Rs. 1.10 crore non-fund based facilities of the Company. The outlook on the long-termrating is stable.

The assigned ratings factor in the experience of the promoters in the industry spanning over a decadeand their well nurtured relationships with the dairy farmers/suppliers which has helped the Company inestablishing a strong procurement base for liquid milk. The ratings also positively factor in thepopularity of the Companys Raaj brand of milk in Southern parts of TN, which, coupled withfavourable demographics (driving domestic consumption) havefuelled the Companys strong revenue

growth in the past fiscals. These strengths are, however, offset by the limited value addition in thebusiness leading to thin margins/accruals and the prevalent intense competition in the business whichrestricts pricing flexibility. The ratings are further constrained by the exposure of the Companysrevenues to high geographic concentration risk (with majority of the sales generated from South TamilNadu), although expected launch of its brand Malabarin Kerala is aimed at partially reducing thisrisk. The ratings also consider the inherent risk of failure in milk-production faced by dairy players onaccount of external factors such as adverse weather conditions and cattle diseases besides thevolatility in raw material prices owing to government administered policies, which adversely impactprofitability of operations.

Company ProfileA.R Dairy Food Private Limited (AR Dairy/ the Company) is primarily engaged in the manufacturingof milk and butter. The Company also sells other products like milk powder, butter, curd, butter milk,flavoured milk and packaged drinking water. The milk and flavoured milk are sold under its brand

Raaj and Milky Choice respectively; packed drinking water is marketed under brand Raaj andMaanus. The Companys milk processing unit is located in Dindigul, Tamil Nadu and has an installedcapacity is 1.5 lakh liter per day (LLPD).

The Company was established, promoted by Mr. R. Rajasekaran, in the name of Sarayu CryogenicsPrivate Limited (Sarayu) during 1995.Sarayu was engaged in the manufacturing of liquid oxygen.During 1998, the name was changed to A.R Dairy Food Private Limited.

Recent ResultsFor the financial year 2011-12, the Company reported net profit of Rs. 1.1 crore on an operatingincome of Rs. 116.1 crore as against a net profit of Rs. 0.8 crore on an operating income of Rs. 73.4crore for the financial year 2010-11.

December 2012

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1100 lakh = 1 crore = 10 million

For complete rating scale and definitions please refer to ICRAs website www.icra.in or other ICRARating Publications

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For further details please contact:Analyst Contact:Mr. Subrata Ray, (Tel. No. +91-22-30470027)[email protected]

Relationship ContactMr. Jayanta Chatterjee, (Tel. No. +91-80-43326401 / 098450 22459)[email protected]

Copyright, 2012, ICRA Limited. All Rights Reserved.

Contents may be used freely with due acknowledgement to ICRA

ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA

ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website

(www.icra.in) or contact any ICRA office for the latest information on ICRA ratings outstanding. All information

contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although

reasonable care has been taken to ensure that the information herein is true, such information is provided as is

without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or

implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein

must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users fromany use of this publication or its contents
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Registered Office

ICRA Limited

195, Kailash Building, 11th Floor, 96, Kasturba Gandhi Marg, New Delhi 19001Tel: +91-11-93357940-50, Fax: +91-11-93357014

Corporate Office

Mr. Vivek MathurMobile: 9871221122

Email:[email protected]

Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 199009

Ph: +91-124-4545310 (D), 4545300 / 4545800 (B) Fax; +91- 124-4050424

Mumbai

Mr. L. Shivakumar

Mobile: 9821086490

Email: [email protected]

3rd Floor, Electric Mansion, Appasaheb Marathe Marg,

Prabhadevi, Mumbai - 400 095

Ph : +91-99-9433 946/ 953/ 969/ 974/ 986/ 987Fax : +91-99-9433 1390

Kolkata

Mr. Jayanta Roy

Mobile: +91 9903394664


A-10 & 11, 3rd Floor, FMC Fortuna234/3A, A.J.C. Bose RoadKolkata700020

Tel +91-33-22876617/8839 22800008/22831411,

Fax +91-33-22870728

Chennai

Mr. Jayanta Chatterjee

Mobile: 9845022459


5th Floor, Karumuttu Centre, 498 Anna Salai, Nandanam,Chennai-600035.

Tel + (91 44) 45964300, Fax + (91 44) 9434 3663

Bangalore


Mobile: 9845022459


'The Millenia',Tower B, Unit No. 904, 9th Floor, Level 9, 19-14, 1 & 9,

Murphy Road, Bangalore - 560 008Tel:91-80- 43396400 Fax:91-80-43396409

Ahmedabad

Mr. L. Shivakumar

Mobile: 989986490Email: [email protected]

907 & 908 Sakar -II, Ellisbridge,Ahmedabad- 380006Tel: +91-79-26585049, 26585494,26584924Fax:+91-79-25569231

Pune

Mr. L. Shivakumar

Mobile: 989986490Email: [email protected]

5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range HillsRoad, Shivajinagar,Pune-411 020Tel: + 91-20-25561194-25560196; Fax : +91-20-25561231

Hyderabad


Mobile: 9845022459


4th Floor, Shobhan,6-3-927/A&B. Somajiguda,

Raj Bhavan Road,

Hyderabad

500082Tel: +91-40-9373 5061 /7951 Fax: +91-40- 9373 5159
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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A.R Dairy Food_r_09012013