Company 4: Hatsun Agro Products ltd

General Overview- Hatsun Agro Products (HAP) is primarily engaged in the

business of manufacture and marketing of ice cream and milk and dairy based
products. The company sells its products under the brands viz. Arun Icecreams
Arokya Milk Hatsun Curd Hatsun Paneer Hatsun Ghee Hatsun Dairy Whitener and
IBACO. The company exports dairy ingredients to 38 countries around the world -
primarily in America the Middle East and South Asian markets.Hatsun Foods was
incorporated as a private limited company in March 1986 by R G Chandramohan. In
April 1986 the company was admitted as a partner in Chandramohan & Co a
partnership firm promoted by the same promoter. During the same month
Chandrmohan & Co was dissolved and all the assets and liabilities of the firm vested
with the company except the Arun brand name which was vested with R G
Chandramohan. In 1987 the company acquired the Arun brand name subject to a
payment of 1% royalty on the company's gross ice cream sales turnover. The
company became a public limited company in August 1995.Till April 1995 the
company was carrying on its manufacturing activities. It scrapped its manufacturing
facilities at Tolgate unit since the facilities became old and outlived its utilities. The
company has put up a 250-kVA windmill for power generation. Hatsun came out with
a public issue in January 1996. The name of the Company has been changed with
the approval of the Central Government from Hatsun Milk Food Limited to Hatsun
Agro Product Limited effective from 7 April 1998.The Company has diversified its
activities and entered into production and sale of Toor Dhall and Urad Dhall under
the brand name 'Apurva'.Hatsun Milk Products Limited was merged with the
Company with retrospective effect from 1.4.98 vide order of high court dated 18.2.99.
and the process of amalgamation was completed on 26.2.99. Ajith Dairy Industries
too merged with the company. The company has also amalgamated Hatsun Foods
Company Ltd. During 2000-2001 the company's second dairy plant was
commissioned at Belgaum.In 2007 Hatsun Agro Products (HAP) launched a new
format of ice cream parlour called Arun Unlimited Parlour'. In 2010 Hatsun Agro
Products (HAP) commissioned dairy plants at Madurai.In 2012 Hatsun Agro
Products (HAP) launched a new premium ice cream parlour format called IBACO'.
During the year the company commissioned dairy plants at Thalaivasal in Tamil
Nadu a milk processing plant at Honnali near Davengere Karanataka and also
commenced commercial production at its curd plant situated at Vellichandai
Dharmapuri district in Tamil Nadu. In 2013 Hatsun Agro Products (HAP) completed
the acquisition of the assets of a cattle feed plant from SKM Egg Products Export
(India) Limited. In 2014 Hatsun Agro Products (HAP) acquired dairy business of
Jyothi Dairy Private Limited. In 2015 Hatsun Agro Products (HAP) acquired a feed
mill unit belonging to VKS Farms Private Limited Coimbatore.On 6 March 2017
Hatsun Agro Products (HAP) announced that it has commissioned wind power plants
with 24 MW capacity at Tuticorin district Tamil Nadu. The power generated from the
plant will be used for captive consumption. Hatsun Agro Products commissioned an
automated packaging film unit a greenfield project at Wallajabad near Chennai and
started its commercial production in October 2017.In June 2018 Hatsun Agro
Products launched a rights issue of equity shares for prepayment/repayment of
borrowings availed by the company. The rights issue was offered in the ratio of one
share for every 16 shares held on the record date. The issue was priced at Rs 555
per share.

Shareholding pattern of the company-

Shareholder’s Name No. of shares % of Share Holding
No of Shares 215563323 100%
Promoters 159659987 74.07%
Foreign Institutions 7545427 3.5%
N Banks Mutual Funds 12610064 5.85%
Others 2861265 1.33%
General Public 31374514 14.55%
Financial Institutions 1512066 0.7%

Management of the company - Hatsun Agro Product Ltd (HAP), often referred as
Hatsun, is a leading private sector dairy company in India based in Chennai. It was
founded by R. G. Chandramogan in 1970. It had become a billion dollar company by
mid-2016. The Company was also awarded "The Fastest Growing Asian Dairy
Company". The Dairy product maker has been bagging the Golden Trophy from the
Indian Government for largest dairy products exporter for the last many years. The
company has tripled its total turnover over the past 3 years and is set to become the
fastest-growing dairy company in the world, with a record growth rate of 116% over
the past 3 successive Quarters. During the financial year 2011–2012, the company
grew at a rate of 23.6%. Future expansion plans in the Middle East and North
America have pushed the company towards capitalising on these regions.

SWOT ANALYSIS
1. Strengths:
1.Over the years, Hatsun has been recognized for its ingenious strategies to deliver
premium quality products processed using avant-garde technologies.
2.Hatsun’s state of the art processing units handle 2 million litres of mik per day. Its
units have modern laboratories equipped for intensive quality control.
3.Has established an extremely efficient supply chain.
4.Hatsun’s procures fresh mil directly from farmers.To facilitate it in this process
Hatsun has around 4,500 ‘Hatsun Milk Banks’(HMBs) covering over 8,000 villages.
Everyday 3 lakh plus farmers pour their milk at these HMBs.

2. Weakness:
1.Declining per capita availability of food grains.
2.Rising animal feed costs.
3.Price sensitive market and intense competition means limited market share.
3. Opportunities:
1.Demand for milk is likely to rise continuously and there is substantial growth
potential.
2.Increase in population and rise in income levelswill see shift in the consumption
pattern in favour of value added products.
3. Consumers, these days prefer traditional beverages like butter milk, lassi, etc. as
compared to carbonated beverages.

4. Threats:
1.Gloomy global economic environment.
2.A gross lack of awareness among farmers about the quality parameters, including
microbiological and chemical contaminants as well as residual antibiotics.
3.The increase in prices of petroleum products and the increasing cost of power.

Competitive Analysis-
Stock Market Cap PE Ratio PB Ratio Dividend
Yield

Hatsun Agro products ltd 19537.58 79.31 21.60 0.88

Nestle India ltd 169710.94 81.50 84.04 1.14

Britannia Industries Ltd 85395.04 45.82 19.24 4.44

Zydus wellness ltd 13609.32 114.62 3.93 0.21

Hindustan foods ltd 4243.33 123.39 22.61 -

Conclusion and way forward for the company – The research study revealed
that financial performs a firm is a fundamental role on investment decisions
making and organization performances, which has been shown to be major
force in investment decision making. This is achieved by implementing the best
fundamental concepts of financial statement analysis for any firm. Present the
company net sales and net income are continuously growing. Keep this kind of
growth forever. The firm need to reduce the operating expenditure for
maximizing the profit. Hatsun agro product is encouraged to continue its
efforts to improve the nutritional quality of its dairy and other products, and to
shift sales towards its healthier dairy products.