Heritage Foods Limited

STATUTORY REPORTS MDA 29 th Annual Report 2020-21 | 113 • Key Financial Ratios as per SEBI Listing Obligations and Disclosure Requirements (Amendment) Regulations, 2018; Particulars 31 March 2021 31 March 2020 Debtors Turnover Ratio 135 88 Inventory Turnover Ratio (on Cost of Goods Sold) 11 16 Interest Coverage Ratio 13.36 4.67 Current Ratio 1.24 0.83 Debt Equity Ratio 0.04 0.35 Operating Pro fi t (PBIT) Margin (%) 9.03% 3.44% Net Pro fi t Margin (%) 6.03% (5.97)% Return on Net Worth (RoNW) 24.45% (34.61)% GROWTH STRATEGY & OUTLOOK Diversify Value-Added Products Portfolio The demand for value-added dairy products has been increasing with the growth of disposable incomes, growing awareness and preference for healthier and nutritious alternatives. The Company strives to cater to the consumers by continuously widening its portfolio of value-added products such as curd, buttermilk, fl avoured milk and paneer etc. Owing to the need of immunity boosting products in the current scenario, the Company has launched Turmeric, Ginger, Ashwagandha and Tulsi milk variants. These products will o ff er the Company to broaden the market share and enhance margins. Enhance Product Reach The increasedpenetrationofmobiledevices anddigital platformhas been creatinganunprecedentedvolumeof data for companies to collect from a wide variety of consumer and non-consumer sources such as trends, preferences, and weather forecasts that could in fl uence purchases. The Company leverages the data to widen its product reach to the prospective consumers. The Company also undertakes strategic marketing and promotional activities to augment the sale of its products and enhance brand recall. It has launched direct to consumer app ‘Heritage Touch’ which is on trial in the Hyderabad market, the response of which has been positive. Upstream Operational Management More than any other food product, dairy products’ quality depends on upstream factors, from the very fi rst input, the feed given to dairy cows to supply variability to cold-chain management to shelf life. When quality deteriorates, the impact is severe and can hurt both consumers and the brand. Integrated modern technology across all the verticals helps the Company boost its procurement and distribution capabilities and better manage the inventory. It aims to minimize the cost and achieve maximum e ffi ciency. (Source: BCG) An E ffi cient Go-to-Market Strategy Because of product perishability, processor’s farm-to-plant-to-retail distribution network must be e ffi cient. The Company has been increasing UHT Processed Milk, which requires no refrigeration. The Company has also been picking, converting and holding all the milk from the farmers by putting the same to further better use to avoid wastages. Outlook 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