Vadilal Industries Ltd Management Discussions.


a) Ice Cream Division Overview

India is the largest producer and marketer of milk. It accounts for over 1/5th of the global milk production. This provides the ice cream industry with a large volume of raw material to manufacture ice creams. The ice cream market in India is forecasted to exhibit a CAGR of 17.03% during 2016-2021. Keeping up with the economys quantum growth in recent years, the ice cream market has also set new records. Today, the total organized Indian ice cream market is estimated at approx. Rs. 6000 crores. Though overall organized & unorganized ice market are estimated near about Rs.10,000 crore with National, Regional & Local players presence. Compared to western countries, per capita Ice cream consumption in India is low. So considering the fact that still In India there is huge scope of ice cream market expansion and penetration with innovative product mix to attract India with all class & mass of Consumers.

The ever-growing urbanization, rise in disposable income, and increase in the "out of home food" consumption coupled with the steep increase in the availability of multi cuisine restaurants in the residential areas are some of the reasons behind the thriving ice cream industry.

The Ice cream industry has evolved, resulting in many developments, right from consumer perception to products and services being offered. Ice creams have seen a shift in the category, from being considered as an indulgent desert to a snacking essential. This, in turn has resulted in innovation within the category. Adapting to the changing trends Vadilal has become the brand with the widest range of ice cream variants. Ice cream as a product has seen a huge transformation and this has created ample of investment and growth opportunities for investors. Vadilal Ice Cream division has shown a sustainable annual growth and aims at maintaining it further in the years to come.

Since inception, Vadilal has been committed towards delivering best quality products at affordable prices to customers from diverse cultures. Improving products in terms of its nutritional value as well as quality is a constant at Vadilal.


Growth in Quality and Quantity

In the past few years, India has seen an inflow of huge number of international ice cream brands, which has offered a plethora of products in the category for the consumers. To curb with the competition and challenges in the market, Vadilal reinvented its strategy to consolidate its leadership. Being brave, like it has always been, Vadilal revamped its look with aggressive marketing approach and the menu to give the brand the lift it required to combat its international counterparts. In a bold step, the company revamped the entire brand identity by introducing a refreshed brand logo, new template and packaging. With all due efforts and now the with same aggressive marketing approach Vadilal products with brand identity with packaging is established in the market and trade with consumers are identifying the Vadilal products with their unique brand color code and visual uniqueness with clutter free brand presence in Trade & Consumer top of mind recall. This was welcomed in the market and worked in the brands flavor in setting a fresher and younger brand perception in the consumers mind.

Apart from aesthetical revamping, the brand also paid special attention towards upgrading the production technology. This has made it easier for Vadilal to offer premium and delectable products.

With International brands crowding the market, consumer awareness and the size of the premium ice cream segment has increased in India. Following these developments, Vadilal introduced many variants in the premium segment like ice cream bars, ice cream sandwiches, Artisan ice cream cakes and ice cream pastries and many more unique product launches with different format, taste & innovation.

Taking forward the tradition of introducing novelty in products at regular intervals, in the year 2019 Vadilal has made numerous additions. The brand had three new delicious additions in its offerings, ice creams in the 1 + 1 party pack form in every 6 months. Also on regular intervals Vadilal is launching new flavors in 1+1 party packs & other innovative products based on extensive R&D as well market with consumers feedback. With such initiatives we have created the unique space in trade & consumer mind.

The brands existing variants like Gourmet, Badabite, Flingo Jumbo Cups and Ice trooper continue to show substantial movement in the market. Besides this, Vadilal has also introduced new delicious products like coffee Orange, Mava badam, Afghaan nuts etc.

While the grown up consumer strata had a remarkable range of products to their delight, Vadilals Ice Trooper range continues to consolidate the kids market and has become every kids favorite across India. This year, a new variant called Ice Trooper Double Spin Pineapple has been added to this popular range.

Growth country wide

Vadilal is growing, the brand spread its wings wide in South India, and enjoyed a widespread acceptance. Vadilal ice creams and frozen desserts were introduced for the first time in Tamil Nadu, receiving an overwhelming response from the consumers. This positive response has got the brand already working on the future endeavors down South.

Growth in Infrastructure and Production

After enjoying a wide spread popularity amongst the mass since decades, the brand is now in constant efforts of upgrading. In the wake of ramping up consumer targeting and brand positioning, it has started exclusive parlors in three formats: Scoop Shop, Hangout & Express. These parlors offer a delicious range of Premium Ice Creams, Scoops and Concoctions in a very enjoyable ambience. These parlors are an exercise to give the brand a youth appeal and also to shift the focus from Mass to Mass Premium.

Introduction of new mega brands, installation of state-of-the-art machines and significant expansion in production facilities is what the brand is focusing on to be an even stronger force to reckon with in the domestic ice cream market. Vadilals strategic approach towards the controlled usage of resources and raw materials has boosted its growth in the market by many folds.

Vadilal proudly possesses the label of having, Indias fastest cone-making machine, with the production capacity of 3.5 lakh cones per day. The brand is known to be the first and the only ice cream producer in India to have a machine with such a huge capacity. This has made Vadilal the largest player in Cones, Cups and Candy categories.

Currently the brands ice cream production facilities are located at Pundhra in Gandhinagar district, Gujarat and the other at Bareilly in Uttar Pradesh. To increase the production capacity and to have better automation, an expansion-cum-modernization project of the factories was undertaken, which has been successfully completed.

Apart from ice creams, Vadilal is also vigorously expanding in categories which offer value chain benefits and show a strong potential to grow. Vadilal already has strong backward linkages with the farmer community for its milk procurement for ice creams at its plant near Ahmedabad. Taking the relationship further, Vadilal has forayed in the flavored milk segment under the brand name "Power Sip". Power Sip is available in flavors like "Kesar", "Elaichi", "Coffee" and "Rose" packaged uniquely for the brand to stand out in the crowd. The research and development team is working towards introducing more flavors in the category specifically to match the palate of the youth.

Quality first

Like every other industry, the ice cream industry has a vast unorganized market that works at low costs and margins. These unorganized players pose the biggest challenge and are a competition to the big players. While there are hurdles in the journey of growth, Vadilal has always seen these unorganized, small yet tough competitors as an opportunity to excel.

Being the 2nd largest ice cream brand in India, Vadilal has always focused on maintaining product quality, and constantly improving the same.

Progress in Niche Market

International brands venturing into Indian ice cream market has provided an impetus for Vadilal to evolve. Vadilal has once again proven its mettle in launching international ice cream experiences in India.

Vadilals MELT IN parlor offers a range of high-end Artisanal Gelato ice cream that has gained a lot of popularity in the past few years.

The brand is making a steady progress in launching new products in the premium segment. The latest introduction in seasonal party packs category with premium quality and unique mix of flavors is quickly catching hold over niche market.

Recently conducted market research through Nielsen India, are most inspiring. With Brand Vadilal, it is most trusted and favored brand amongst India with all classes & masses especially in Youth consumers. Within the research Consumers relate the Vadilal brand with Heritage and legacy producing unique products, Health, Hygiene & Happy feeling .

b) Processed Food Division Overview:

The global frozen food market is fragmented into ready to eat, ready to cook and ready to drink frozen foods. The popularity of ready to eat meals has witnessed a rapid rise. The market is primarily driven by rising disposable income, the introduction of longer shelf life products, increasing impulse purchasing, and huge demand for frozen food products, due to the lack of time. The market evolved from selling raw foods, such as frozen vegetables, and fruits to prepared foods and frozen vegetable mixes (with bread, rice, pasta and curry), frozen desserts, and bakery products. Ice creams emerged as the leading product category in the market.

Consumers globally have recognized frozen food as one of the healthier options in the ambit of packaged products available. Today frozen foods have become more accessible owing to the increase in number of large format retail stores. Major factors driving the industry constitute to be the customer craving, rising awareness and acceptance, increase in selling points, deeper penetration by organized players and surging availability of freezer space at the retail domain. Advances in freezing technologies, innovative refrigerator displays in supermarkets, better and faster supply chain solutions have been owing to the increasing consumption and therefore growing demand of frozen foods. Frozen foods have now become a regular part of daily diet worldwide. The increased demand for frozen desserts in the developed countries is supporting the sale of icecreams in those regions.

The year 2020 has witnessed a breakdown of Coronavirus (COVID-19) across the world. The lockdown and panic situation around the globe has propelled the demand for the frozen food products owing to their higher shelf life. In addition, it helped the customers to reduce their number of visits to the market places for shopping of frozen food products. These world market trends are anticipated to fuel the market for frozen food in the year 2020.


The global frozen food market is expected to grow from $161.1 billion in 2019 to $164.2 billion in 2020 at a compound annual growth rate (CAGR) of 2%. The low growth is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 6% from 2021 and reach $196.5 billion in 2023.

The global ice cream and frozen dessert market is expected to grow from $94.6 billion in 2019 to $97.5 billion in 2020 at a compound annual growth rate (CAGR) of 3.1%. The slower growth is due to the COVID-19 situation. But the market is then expected to recover and grow at a CAGR of 8% from 2021 and reach $120.7 billion in 2023.

Europe was the largest market for frozen food, with a share of more than 35% in 2019. The region is severely and largely hit by the COVID-19 pandemic. This has propelled huge demand for frozen food in Europe amid coronavirus breakdown.

Emerging countries - India, Australia, Japan, and South Africa are growing with highest CAGR and are lucrative markets for frozen food, growing at a CAGR of 8.5%, 8.2%, 7.8% and 9.2%, respectively.

Asia-Pacific is expected to generate revenue of US$ 81.74 billion by 2026. Ready to eat segment has registered high growth in demand in this region over the past five years owing to the changing lifestyle and increasing working women population in the region and is projected to register exponential growth over the forecast period. Based on products, the frozen vegetable segment accounted for a major share in market demand.

Increase in use of frozen food products by giants such as KFC, McDonalds, Pizza Hut, Subway, acts as a key driver of the global frozen food market. Moreover, the utilization of these products as a substitute to fresh ingredients by numerous end users such as full-service restaurants, hotels & resorts, and quick service restaurants is expected to drive the growth of this market, as they require less time to cook and reduce customer-waiting time.

At the global retail front, Frozen food companies are investing in innovative packaging to offer better quality frozen food product and more convenient packaging to carry and use frozen food. Some of the innovative features in packaging include microwavable bags/trays, reusable zip closures and eye-catching graphic designs, thus making frozen food more convenient to use and appealing to consumers. Vadilal has been a frontrunner in this by offering unique packaging for frozen food, which lets consumers quickly and safely cook frozen food in a microwave, reusable zip closures in every IQF packaging along with appealing and easy-to-read graphic design.

Future Strategy:

Vadilal operates across 45 countries including the countries in North and South America, Europe including the UK, the Middle East, South East Asia and Australia. These international territories have worked as the most remarkable growth contributors to Vadilals business and hence the company is looking forward to expand the product portfolios in every territory basis the market needs and proper research.

Over the years, the International Business has diversified its consumer base from not just serving the Indian diaspora but customizing its product portfolio according to the needs and preferences of local consumers, including Indians residing abroad. Hence, we now are completely equipped and have started to promote our products to the mainstream giants and looking forward to making a strong foothold in these markets in the near future. We have identified strong business avenues and have partnered with them, apart from retail that has led to bulk increase in sales. We look forward to further strengthen and scout for more such avenues.

Our product line has been increasing remarkably looking at the business opportunities in various international territories. All these have been done by optimizing our resources, be it human and production capacities. Product portfolio will also be optimized looking at the most beneficial products to the business; pushing the ones that are in demand, discontinuing the ones that are not and introducing newer ones that can fuel our growth.

The post-COVID scenario will also be in our favour as the Govt. of India has been pushing for products that are Made in India but Made for the World This will be beneficial to our export business.

c) Forex Division


VADILALFOREX provides value-based consultancy services to Importers, Exporters and Traders in Foreign Exchange, since April 1996.

With the update in website - early April 2019 as also introduction of "Mobile Application" VADILALFOREX remain on top whole of Gujarat and even on all India basis ranking 5th with number of service subscribers.

With problem of Trade War between US and China, international trade has come down. Still VADILALFOREX is able to keep hold on subscribers.

LME Base Metal and Bullion services, are also part of FOREX services.

Metal and Precious metals globally facing more problem. High of the Inventory of most of the Base metal globally, trading activities gradually coming down which reflects to our services as well. Still number of subscribers that we had last year and with some additions the section is performing well.

FFMC - Money Changing Activities part of Vadilal Industries Limited.

VADILAL is the 2nd in private sector with AD. II license granted by RBI providing value-based Money Changing activities and remittances connected with Current Account activities with selected transactions. The activities involved by the division is selling / buying foreign exchange from tourists, internal banking and other money changers. After having ADII category license VADILALFOREX remain in forefront for doing remittances abroad on behalf of Indians within directives covered in Current Accounts free remittances under FEMA. This Division ONLY operates from Ahmedabad.


a) Ice-cream Division

Indias ice cream market was dominated by the impulse category of ice creams since the past 5 years, and this category is further expected to continue its dominance during the forecast period as well, owing to growing demand for premium ice creams and changing consumer taste.

Looking at the trends from the recent past, we foresee fast growth in the ice cream and frozen dessert category. However, along with the increasing demand for convenience, the continuing need for value as a trend is growing as well. Earlier, Vadilal was focused on offering only mass segment products. However, we have been able to increase our share in the premium segment as well and it has resulted in an overall enhanced growth. We plan to continue with the strategy of consolidating our presence in the high-end premium segment.

Distribution and Logistics

Distribution plays a key role in the success of a business. We plan to increase our reach in the existing market in terms of consolidating our presence in Cash and Carry format as well as the Modern Retail segment. The logistics of ice cream, being a cold chain product, are complex and we are continuously expanding our cold chain distribution network through refrigerated vehicles and deep freezers.

We have worked on increasing the physical touch points with our consumers and executed it by putting in place a robust network of dealers, FOWs (Freezer On Wheels) and Ice Cream parlors. Along with various extensive ATL marketing campaigns, a heavy investment has been done in various BTL marketing activities to enhance consumer experience. We are also committed towards deeper penetration in trade sector. Innovative cross promotional activities and digital media activities have been our point of focus to increase consumer engagement.

b) Processed Food Division

The fear of COVID19 has come as an opportunity for frozen food and ready-to-eat products as most people have been working from home and restricting their frequent visits to the shop. Stocking up of frozen, ready-to-eat and ice-creams has been the key practice that has been seen and it is most likely to stay for nearly a year. This practice can also lead to becoming habituated to frozen and ready-to-eat food as they taste better than home cooked food as they have been prepared by food connoisseurs.

With the sales garnering up in this segment vis-a-vis fresh food supplies like the restaurants and the likes, a marginal rise in new players entering the market has also been witnessed. Apart from rise in competition, the inclusion of new players will also lead to further expansion of the frozen food and ready-to-eat segment.


The Company has earned Revenue from Operations of Rs. 51662.97 lacs during the year ended on 31st March, 2020 as against Rs. 50705.76 lacs earned during the previous year ended on 31st March, 2019 giving an increase of 1.86% as compared to previous year.

After adding thereto, the other income of Rs. 842.08 lakhs, the Company has earned total income of Rs. 52505.05 lakhs during the year under review. It has incurred total expenses of Rs. 49066.66 lakhs including Finance cost of Rs. 1472.53 lakhs and Depreciation and Amortization expenses of Rs. 1887.89 lakhs, during the year under review.

The Company has earned profit before Tax of Rs. 3438.99 lacs during the year under review as compared to Profit of Rs. 4867.61 lacs during the previous year ended on 31st March, 2019. The Company has earned profit of Rs. 3214.77 lacs during the year ended on 31st March, 2020 after deducting Current Tax of Rs. 860.43 lacs and Deferred Tax of Rs. (636.21) lacs as compared to Profit of Rs. 3148.38 lacs during the previous year ended on 31st March, 2019.

Turnover History
Financial year Rs. in lakhs
2010-11 23613.82
2011-12 28580.25
2012-13 32765.9
2013-14 37170.32
2014-15 41288.57
2015-16 45538.21
2016-17 48438.1
2017-18 52013.98
2018-19 50705.78
2019-20 51662.97


The company is primarily engaged in one business segment namely Food segment as determined by the chief operating decision maker in accordance with IND AS 108 - "Operating segment" and hence, Segment-wise Performance of the Company has not been provided.


a) Ice Creams Division

Brand Vadilal has a 10% of organized market share against total organized Indian ice cream market which is estimated at approx. Rs. 6000 crores. Vadilal has a robust and extensive pan-India distribution network with more than 1,25,000 dealers and trade partners that cater to every nook and corner of the country.

Vadilal stays ever ready for competition with a strategy in place before hand. Keeping a check on competitor products and constantly innovating is the key to stay at par with the ever changing market. The unorganized market that pose a threat to the sales are taken care of by maintaining quality in our products. Expertise and decades of experience is what makes Vadilal stand a class apart in the highly competitive market.

However, there are certain concerns like infrastructure and rising input costs, which the company keeps in mind and is working towards.

b) Processed Food Division

Fake news that are spread by invalidated reports without being fact checked has been the biggest concern for our industry. During the early days of COVID19, baseless rumors got spread that ice-creams and frozen food shouldnt be consumed. WHO and government organization had to come forward and make the citizens understand that those rumors were baseless and further pleaded people not to believe in fake news. Such fake news spread like wild fire which will always be the biggest concern for our industry.


In view of the management, the Company has adequate internal control systems for the business processes followed by the Company. The External and Internal Auditors carry out periodical reviews of the functioning and suggest changes if required. The Company has also a sound budgetary control system with frequent reviews of actual performance as against those budgeted.

The Audit Committee of the Board meets periodically to review various aspects of the performance of the Company and also reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening them from time to time. The External Auditors also attend these meetings and convey their view on the business processes and also of the policies of financial disclosures. When found necessary, the Committee also gives suggestions on these matters.


Employee being prime force the Company gives equal emphasis on employee development and their engagement. The Company believes in enhancing the competencies of employee to create a high performing and innovative organization. Equal emphasis is given on the on technical & soft skills. There are cordial relations between the management and employee of the Company.

As on 31st March, 2020, the Company has employed total 693 employees at all locations.


Ratio 2020 2019
Interest Coverage Ratio 3.59 4.89
Net Profit Ratio 6.12% 6.06%
Return on Net worth Ratio 13.75% 15.50%
Operating Profit Margin Ratio 9.35% 12.05%


The statements made and figures given in the various sections of "Management Discussion and Analysis" are keeping in mind the Companys objectives, estimates and expectations. The Actual results may differ from those expected depending upon the economic conditions, changes in Govt. Regulations, tax regimes and other external and internal factors.