Some of the interesting facts on Q3 commentary
- Why Gross Block is one of key parameter of FMCG company?
Some key aspects on gross block of commentary:
I would like to highlight that in the last 5 years, our gross block has grown fivefold to more than INR1,000 crores. This has been done on the back of both greenfield expansion as well as M&A. This strong foundation is now enabling us to plan for new investments that will set tone for the future growth over the next few years!!!
We will invest around INR800 crores, INR900 crores in gross block in next 2 years. Some of it already been in public domain, the ice cream factory or the shoe business or Baddi and all those things. And the fundraise, which we have done, coupled with the debt which we take and also the internal accruals will fund this growth for next 2 years.
Assume at the end of the FY26, Gross block will be 1800-1900 Cr and 4X assets turnover means ~ 3600 -3800 Crores turnover in future. (The company target of 4000 Cr, which one match on this concept)
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In addition to the continued investment in the FMCG business, like our new ice cream plant in Haryana, the new beverage plant in Assam and a few others that we are working on, we’ve also been working on opening up adjacent sectors where we think we can grow. One of these sectors is OTC pharma and health care products in which the company has identified certain M&A opportunities. : This one apart from existing unit at Baddi.
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The other sector that we’ve been bullish about has been the sports shoe category, where we are seeing some tailwinds due to the government policies and global trade movements. To leverage this, we again have decided to go the route of inorganic growth and have identified some M&A opportunities, which should help us scale this business sooner. They have already announced on 01.04.2024.(
perfectly tick)
Now after the shoe acquisition, and I’m talking about maybe a quarter from now, we will have a slightly larger take in terms the gross margins for a couple of reasons. One, that there is a lot of shared manufacturing as far as the shoe business is concerned. And the shoe business functions in a completely different way. The shoe business will become sizable in the next, let’s say, 6 months. And post that, I will come back to you with some kind of definite guidance in terms of
gross margins. (Improvement in Gross margin means bottom-line to some extent will be improved)
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