Key highlights

Sales declined due to GST rollout impact. Rs 16 cr net sales in June month lost due to inventory reduction in trade. This it had 800 bps is impact at top-line.

Bulk of impact of GST was on Sundrop oil and Act II ready to cook, which has large business.

Ready to eat Act II did well and grown by 23%.

Sundrop oil sales declined by 8% while Act II ready to cook declined by 1%.

ASP reduced –due to inventory reduction in trade. By July and August will be back on air and as GST transition impact reduces will be back to normal. The mgmt expects ASP sales ratio to same as last year.

Employee cost rise is due to fleet on street .

Interest charge low due to clearing of debt.

Sundrop volume down 5% and net sales down 8% in Q1.

Peanut butter volume grew by 18% and sales by 55% to Rs 8 crore.

Act II consumer business volume growth was 2% and value growth was 2%.

Crystal volume grew by 10% and net sales by 4-5% to Rs 30.7 crore.

Vending business was down by 10% in volume and value. Sales were at Rs 3.6 crore.

The mgmt said that 3-4% of market share is achievable for it in whole snack market.

Started aggressive wholesales chain building two quarters back.

Expects ready to eat popcorn to get equal to ready to cook popcorn. In many countries ready to eat popcorn has cross ready to cook pop corn

Act II will be spread in various snack categories. This year wills see Act II getting in new categories with increasing distribution. Same with Sundrop brand getting in to various products. Indian snack products will come under Sundrop brand while western snack under Act II brand.

61K outlet is distribution of edible oil, 50K of peanut butter and 200k of Act II.

Data shows- Western snack has better gross margin then Indian snack. Potato chips on theory has larger gross margin. PAT margin of Indian snack players are not that much lower than western snack players. Most of them like Haldiram, Parle Agro operates at PAT margin of 7-8%. If Selling, General and Administrative Expenses (SGA) is high, then any snack company will be in problem

Chitoor plant – construction started and middle of next year it will start commercial production.

Food business is running at 40% capacity utilization

Next 3-4 years will not require any big capex.