tasty dairy specialities ltd share price Management discussions



According to a report from IMARC, the industry is expected to grow over 5.09 per cent between FY 2022 to FY 2027. Milk production in New Zealand increased by 9.8% in March, 2021 compared to March, 2020 even after drier climate conditions in the country. Production was down by 0.8% in February, 2021 compared to the same period last year. The major reason for decreasing production was reducing herds, labour challenges and farm exits. EUs milk production dropped by 3.8% in February, 2021 and many EU countries like Germany, France and Netherlands faced this problem. The US experienced an increase in the production of milk by 1.8%


Dairy Industry in India

India is the largest producer and consumer of dairy products in the world. It produces 22 % of the total global dairy production. The dairy industry is an essential part of the rural economy and is one of the major sources of employment and income for the rural population.

According to a report by IMARC, the dairy industry is expected to grow at a CAGR of 14.98 % between FY2022- 2027. Majority of the dairy produced in India is consumed domestically, most of which is liquid milk. As per a report by CRISIL, revenue from the organised dairy sector will rebound by 12 % in FY 2022 compared to the growth of approximately 1 % in FY 2020-21. The growth would be largely due to the pick-up in demand of value added products (VAP), steady sales of liquid milk and rising retail rates in the year. Operating profitability is expected to reach its pre-pandemic levels as a result of high packaging and transport costs and high raw milk prices.

Government Initiatives

The Government of India has implemented the Rashtriya Gokul Mission from FY 2021-22 to improve productivity and enhance milk production. These schemes aim to improve remuneration for farmers. An allocation of Rs. 2400 crore has been made over the next five years. Many new technologies have been made available to the farmers under these schemes which focus on promoting private entrepreneurship to enhance affordability and increase access. With efficient implementation, it is expected that 8 crore farmers involved in the dairy industry will benefit directly as a result of the increased milk production, which is expected to increase from 198.4 million metric tonnes in FY 2019-20 to 300 million metric tonnes in FY 2024-25.

B. Opportunities

Increasing Health Awareness - As an after effect of Covid people are opting more for nutrient-rich and immunity-boosting foods.

Participation of start-ups in the dairy industry- It will support significant infrastructure investment across processing, chilling, logistics, cattle feed etc.

Rising Income levels - With income levels rising, the spending on dairy and value-added products has been on the rise. Affordable innovation would help people buy more of the products from the Company.

Demand for premium products - As income levels rise and lifestyles change, consumers are demanding products with innovation and benefits. This provides an opportunity for the food and dairy companies to innovate and launch products that will attract the consumers to the Company. COVID-19 converted "out of home consumption" trend into "order online". As the consumer intent to shop online continues to increase, it will create more opportunities for the value added dairy product category.


1. Increased competition from local players and international companies

2. Lack of awareness among the farmers and dairy farms not being in the best of the conditions

3. Extensive cross-breeding for raising milk productivity may lead to disappearance of indigenous cattle

4. Unusual climate change and adverse weather conditions

5. Rapidly changing preferences amongst customers

C. Product- wise Performance

Financial Year 2022-23

Sl. No. Item Name Item Type Qty. (Units in Kgs)
1 Skimmed Milk Powder Manufactured 4545.00
2 Ghee/ Milk Fat Manufactured 18254.80
3 Gulab Jamun (Sweet dish instant mix) Manufactured 360682.20
4. Milk Liquid Manufactured 19433382.00
5. White Butter Manufactured 1250.00
5. Others (Maida, Whey Powder, Verifresh Chhach etc.) Manufacturing 382150.00


Our Company was originally incorporated as a private limited company on 30th July, 1992 under the name Tasty Diary Specialities Private Limited vide certificate of Incorporation dated July 30, 1992, issued by the Registrar of Companies, Kanpur under the provisions of Companies Act 1956. Subsequently our Company was converted into a public limited company pursuant to special resolution passed at the Extra-ordinary General Meeting of our Company held on April 10, 2004 and the name of our company was changed to "Tasty Dairy Specialities Limited" Upon conversion into a public limited company, a fresh certificate of incorporation was issued by the Registrar of Companies, Kanpur on November 25, 2004. The Corporate Identification Number of our Company is L15202UP1992PLC014593. Our Company is currently involved in processing milk, along with bulk milk procurement and handling during season time which primarily caters to bulk and marquee institutional customers. Company is also involved in value added milk products like SMP, butter, ghee, dairy whitener, concentrated milk etc.

Our Company has wide range of quality dairy products under its umbrella which includes Pasteurized Liquid Milk, Cream, Butter (White/Salted), Pure Desi Ghee (Clarified Butter),Paneer (Fresh Cottage Cheese), Skimmed Milk Powder, Full Cream Milk Powder, Dairy Whitener, Instant Gulab Jamun Mix, Mithai Powder etc., are packaged under the brand names "UJJWAL", "SHIKHAR", "VERIFRESH", "CIMA", "MITHAI MASTER" which are available in Uttar Pradesh, Madhya Pradesh and Bihar, whereas, the institutional products are supplied pan India. As of March 31, 2023, our distributor network included more than 15 distributors through which we serve a large number of retail outlets.

We have received several quality certifications relating to our products and production facilities, including ISO 22000:2005 certification from IRCLASS Systems and Solutions Private Limited for receipt of raw milk, processing, packaging, storage and dispatch of pasteurized milk and milk products. The company has made constant efforts in raising the bar by achieving various quality standards like BIS certificate from Bureau of Indian Standard in respect of skimmed milk powder, AGMARK quality certification for ghee, approval for processing and packaging of milk products for export by Export Council of India. Our products undergo stringent quality check and meet the highest standards set by our customers.


Indian Dairy industry witnessed a steady recovery after the COVID-19. Most of the value-added product categories are expected to deliver a double digit growth in the coming years. Rapid urbanisation and population growth will help in robust growth of the liquid milk market, which is estimated to grow by 2.5 times in the next 5 years.

The outlook for dairy industry seems promising owing to strong commodity prices, recovery in economic growth and improving consumer sentiments. The dairy industry provides ample growth opportunities, driven by growing population and urbanization, changing dietary patterns and increasing demand for value-added milk products. The Company strives to leverage these opportunities and create innovative products that meet diverse consumer requirements. Automation in operations will be instrumental to strengthen its supply chain and improve processes, while ensuring minimal wastage and premium quality. Further, the Companys expenditure on marketing and advertising would help to reinforce its brand name.


Types of Risk Description Mitigation Strategy
Competition Risk The Company faces competition from local players, large private players. To mitigate this risk, the Company-
1. Ensures that they know the competition-Produces differentiated products
2. Strategies to gain competitive advantage
3. Plans to update its brand image
4. Regularly listen to the existing customer
Climate Risk Unpredictable weather conditions such as drought, rainfall, heat etc. can affect the product of milk and thus cause fluctuations in price. The Company ensures that it has upgraded to newer technologies to help farmers in addressing varied climatic condition and its impact on dairy production.
Operational Risk System failure, equipment failure 1. Identifying risks in the market
and anything that can disruption in course of the business can result in losses. 2. Analysing risk levels and assessing the severity of the risk.
3. Monitoring and evaluating risks and the risk management system periodically.
4. Appointing right set of people to evaluate the risks and plan the strategy to face the risks.
Quality Risk Risk of the product not being of upmost quality and other issues such adulteration, contamination or tampering, which may result in product being recalled can lead to financial losses. Setting up of a standard production process, robust quality control process, advanced manufacturing process, planning preventive and corrective activities are adopted by the Company to mitigate this risk.
Regulatory Risk Inability to comply with the applicable laws and regulations may lead to stringent penalties, claims and reputational damage. With efficient corporate governance practices, the Company ensures its functions are aligned with the industry.
Raw Material Continuous change in prices can result in costly raw material which can increase cost of production and further cause losses to the Company. Sourcing of the highest grade materials, incoming raw material testing and inspection, dual sourcing of raw material and customer-specific raw material requirements are the steps adopted by the Company to lower raw material risk.


The Company has a well-framed internal control system commensurate with the size and nature of its business. These internal controls ensure safeguarding of assets from unauthorised use or disposition, proper recording and reporting of all transactions and compliance with applicable regulatory requirements. The internal control systems are reviewed and modified continually to keep up with the changes in business environment and statutory requirements.


Summary of the Results of Operation:

(in lacs)

For the year ended March 31,

2023 2022
Revenue From Operations (Net Of Taxes) 11,143.47 16,154.55
As a % of Total Revenue 99.08% 99.45%
Other Income 102.88 88.88
As a % of Total Revenue 0.92% 0.55%
Total Revenue 11,246.35 16,243.43
Cost of Material Consumed 10,678.42 15,805.50
Purchase Of Stock-in-Trade - -
Changes in Inventories of Finished Goods, Work-In- (186.42) 2,660.06
Progress and Stock-in Trade
Employee Benefit Expenses 158.88 298.67
Financial Cost 630.07 633.86
Depreciation and Amortization Expenses 133.68 132.45
Other Expenses 787.20 772.99
Total Expenses 12,201.83 20,303.53
As a % of Total Revenue 108.50% 124.99%
Profit/(Loss) before exceptional items and tax (955.48) (4,060.10)
As a % of Total Revenue (8.49%) (24.99%)
Less: Exceptional Items 1022.11 -
Profit before tax 66.63 (4,060.10)
As a % of Total Revenue 0.59% (24.99%)
Tax expense :
Current Tax - -
MAT Credit Utilization - -
Income Tax relating to earlier year 6.94 0.17
Deferred Tax 68.84 (1,163.99)
Total Tax Expenses 75.78 (1,163.82)
As a % of Total Revenue (0.67%) (7.16%)
Profit/(Loss) for the period after tax- PAT (9.15) (2,896.28)
As a % of Total Revenue (0.08%) (17.83%)

Over View of Result of Operations and Comparison of Financial Year ended 31st March, 2023 with Financial Year ended 31st March, 2022.

Net Sales

The Net Sales of the Company has decreased from Rs. 16044.31 Lacs in F.Y. 2021-22 to Rs. 10091.67 Lacs in F.Y. 2022-23.

The decrease is mainly due to: -

i) Shortage of working capital.

Other operating Income

The Other Operating Income of the company has increased from Rs. 110.24 Lacs in F.Y. 2021-22 to Rs.151.80 Lacs in F.Y. 2022-23. The increase is mainly due to increase in job work income.

Other Income: -

The Other Income of the Company has increased from Rs.88.88 Lacs in F.Y.2021-22 to Rs.102.88 Lacs in F.Y.2022-23.

Expenditure: -

The Expenditure of the Company has decreased from Rs. 20303.53 Lacs in F.Y.2021-22 to Rs. 12201.83 Lacs in F.Y.2022-23. The decrease is mainly due to decrease in Turnover.

Net Profit / (Loss) after Tax and Extra Ordinary Items:-

The Loss after Tax has decreased from Rs. (2896.28) Lacs in the F.Y.2021-22 to Rs.(9.15) Lacs in F.Y.2022-23. In F.Y. 2021-22 due to deterioration, the stock which was found unfit for human consumption was identified as deteriorated stock & valued at realizable value which resulted in loss of approx. Rs. 3381.31 Lacs, there is no such deteriorated stock identified in F.Y. 2022-23.


No material development in Human Resource. Expenses on employee benefit express reduced due to decrease in production, sales & decrease in number of employees.


S.No Particulars 2023 2022 Change in % Reason
(i) Debtor Turnover Ratio 3.72 5.00 -25.60 Due to fall in Revenue
ii) Inventory Turnover 3.74 3.61 3.60 Due to decrease in average inventory
iii) Interest Coverage Ratio NA NA NA NA
iv) Current Ratio 1.92 1.02 88.24 Due to loss during the year
v) Debt Equity Ratio 1.42 0.51 178.43 Due to conversion of CC A/c and Bank O/D A/c into term loan as per restructuring package. (Refer note 15)
vi) Operating Profit Margin (%) (0.99) (18.37) -15.80 Due to Increase in Loss
vii) Net Profit Margin (%) (0.08) (17.83) 99.55 Due to decrease in Loss

"Operating Profit includes Exceptional Items of Rs. 1022.11 Lacs


Particulars 2023 (in lacs) 2022 (in lacs)
Equity share capital 2043.00 2043.00
Other Equity 1069.50 923.22
Net worth 3112.50 2966.22
% Change 4.93

Due to restructing of loan & resultant increase in exceptional profit.


By the order of Board of

for Tasty Dairy Specialities Limited

Date : September 02, 2023
Place : Kanpur
Chairman & Whole time Director Executive Director
DIN : 00811607 DIN : 02727150