Executive Summary
In Q4 2023, Parag Milk Foods Limited reported a revenue of ₹8,009.56 million, reflecting a minor decline of 1.35% year-over-year and a sequential decrease of 1.34%. The gross profit figures also saw a notable decline, plummeting by 13.65% year-over-year and 30.05% on a quarter-over-quarter basis, resulting in a gross profit margin of 21.3%. Operating income fell drastically, down 23.60% year-over-year and a staggering 58.83% sequentially, pointing towards increased operational challenges. Management attributed these declines to market pressures and rising operational costs linked to inflation and supply chain constraints.
Net income decreased significantly during the quarter, dropping 56.10% year-over-year to ₹223.52 million, while Earnings Per Share (EPS) also fell by 56.02%. This performance raises concerns about sustainability amidst the competitive landscape of the packaged foods industry in India. Investors should keep an eye on the strategic responses from management in addressing these financial pressures and the overall market outlook.
Key Performance Indicators
QoQ: -30.05% | YoY:-13.65%
QoQ: -58.83% | YoY:-23.60%
QoQ: -71.28% | YoY:-56.10%
QoQ: -71.13% | YoY:-56.02%
Key Insights
**1. Revenue**: ₹8,009.56 million (YoY: -1.35%, QoQ: -1.34%)
**2. Gross Profit**: ₹1,707.21 million (YoY: -13.65%, QoQ: -30.05%)
**3. Operating Income**: ₹286.80 million (YoY: -23.60%, QoQ: -58.83%)
**4. Net Income**: ₹223.52 million (YoY: -56.10%, QoQ: -71.28%)
**5. EPS**: ₹1.91 (YoY: -56.02%, QoQ: -71.13%)
These metrics indicate rising pressures on profitability and highlight the need for improved operational efficiency. The company has faced challenges...
Financial Highlights
1. Revenue: ₹8,009.56 million (YoY: -1.35%, QoQ: -1.34%)
2. Gross Profit: ₹1,707.21 million (YoY: -13.65%, QoQ: -30.05%)
3. Operating Income: ₹286.80 million (YoY: -23.60%, QoQ: -58.83%)
4. Net Income: ₹223.52 million (YoY: -56.10%, QoQ: -71.28%)
5. EPS: ₹1.91 (YoY: -56.02%, QoQ: -71.13%)
These metrics indicate rising pressures on profitability and highlight the need for improved operational efficiency. The company has faced challenges, particularly in managing costs and meeting revenue targets against inflationary pressures.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.01B |
-1.35% |
-1.34% |
| Gross Profit |
1.71B |
-13.65% |
-30.05% |
| Operating Income |
286.80M |
-23.60% |
-58.83% |
| Net Income |
223.52M |
-56.10% |
-71.28% |
| EPS |
1.91 |
-56.02% |
-71.13% |
Key Financial Ratios
operatingProfitMargin
3.58%
Management Commentary
Market Conditions: Management noted, "The packaged foods sector is influenced by external cost pressures which are impacting our margins. We are committed to mitigating these through cost optimization strategies."
Future Strategy: In referencing innovation, management stated, "We continue to expand our product lines and enhance distribution capabilities, which we believe will help capture market share moving forward." This indicates a focus on adaptability in a shifting marketplace, which is essential given recent financial trends.
"The packaged foods sector is influenced by external cost pressures which are impacting our margins. We are committed to mitigating these through cost optimization strategies."
— Management
"We continue to expand our product lines and enhance distribution capabilities, which we believe will help capture market share moving forward."
— Management
Forward Guidance
Looking ahead, management has emphasized a commitment to improving operational efficiencies and exploring opportunities in product diversification. They have set an internal target to stabilize gross profit margins by Q1 2024, although external market conditions remain uncertain with inflationary trends expected to persist. Key factors for investors to monitor will include the implementation of cost control measures and consumer response to new product offerings in the forthcoming quarters.