SCPL - Sheetal Cool

📊 NSE: SCPL 🏢 Food - Processing - Indian 📅 Last Updated: 12/14/2025 13:11

💰 Financial Performance

Revenue Growth by Segment

Total revenue for 9MFY25 was INR 228 Cr, representing a 14.9% decline compared to INR 268 Cr in 9MFY24. The company has delivered a poor 5-year compounded sales growth of 4.41%, while the 3-year growth is slightly negative at -1%.

Geographic Revenue Split

The company exhibits high geographic concentration with ~75% of revenue derived from Gujarat, followed by Maharashtra at ~15%, and the remaining 10% from Rajasthan, Madhya Pradesh, and other states.

Profitability Margins

PAT margins stood at 5.86% in FY24 (INR 20.84 Cr) compared to 5.98% in FY23 (INR 20.45 Cr). Operating margins have been volatile, ranging between 9.7% and 13.6% over the four fiscals through March 2024.

EBITDA Margin

EBITDA margin was 13.11% in FY23 (INR 44.83 Cr) and 12.28% in FY22. Operating margins are expected to moderate to approximately 11-11.5% for FY25 due to high raw material costs and competitive pricing pressures.

Capital Expenditure

The company has planned a debt-funded capital expenditure (capex) for fiscal 2026 to expand capacity and support its entry into new markets like Uttar Pradesh and West Bengal.

Credit Rating & Borrowing

Crisil reaffirmed a 'Crisil BBB/Stable' rating in May 2025. Conversely, Infomerics downgraded the company to 'IVR BB-/Negative' and classified it as 'ISSUER NOT COOPERATING' due to non-furnishing of information. Interest coverage is comfortable at over 6 times as of H1 FY24.

⚙️ Operational Drivers

Raw Materials

Key raw materials include raw milk, Skimmed Milk Powder (SMP), and various packaging materials. Milk prices are highly volatile and directly impact the operating margin, which fluctuates based on the company's ability to pass on costs.

Import Sources

Primary procurement is domestic, centered in Gujarat and surrounding regions to support its manufacturing base in Amreli.

Key Suppliers

The company maintains relationships with a vast network of milk suppliers and over 400 distributors to manage its supply chain.

Capacity Expansion

Capacity expansion is scheduled for fiscal 2026 to increase volumetric sales and support the distribution network expansion into Northern and Eastern India.

Raw Material Costs

Raw material costs are a significant portion of the expense structure; high costs in Q2 FY25 impacted margins, though they recovered to 11.3% in Q3 FY25. Procurement is seasonal, peaking between October and March.

Manufacturing Efficiency

Efficiency is monitorable through the company's ability to ramp up planned capacity and maintain operating margins above 11% amidst input price volatility.

Logistics & Distribution

The company is increasing its distribution network by opening new outlets in Gujarat and commencing distribution to UP and West Bengal to reduce regional dependency.

📈 Strategic Growth

Expected Growth Rate

5-6%

Growth Strategy

Growth will be driven by a debt-funded capacity expansion in FY2026, increasing the distribution footprint in UP and West Bengal, and leveraging a diversified product mix including ice cream, frozen foods, and snacks.

Products & Services

Ice cream, milk, lassi, buttermilk, flavored milk, namkeen, wafers, fryums, frozen foods, bakery products, and sweets.

Brand Portfolio

Sheetal and J'adore.

New Products/Services

The company continues to diversify into frozen items and bakery products to complement its core dairy business.

Market Expansion

Targeting expansion beyond the core Gujarat market into Maharashtra (currently 15%), Rajasthan, Madhya Pradesh, Uttar Pradesh, and West Bengal.

Market Share & Ranking

Not disclosed in absolute percentage, but it holds an established market position in the Gujarat dairy and snacks segment.

🌍 External Factors

Industry Trends

The FMCG and dairy industry is seeing a shift toward organized players, but remains highly competitive. SCPL is positioning itself by diversifying into value-added products like frozen foods and snacks which offer different margin profiles than liquid milk.

Competitive Landscape

Faces intense competition from large organized dairy cooperatives and local unorganized snack manufacturers.

Competitive Moat

The moat is built on the 25-year experience of the Bhuva family and an established distribution network in Gujarat. However, this is challenged by low switching costs for consumers and intense competition.

Macro Economic Sensitivity

Highly sensitive to agricultural output and cattle health; cattle diseases can lead to milk shortages, impacting production volumes.

Consumer Behavior

Demand is seasonal, particularly for ice cream and cold dairy products, peaking during summer months.

Geopolitical Risks

Susceptible to government regulations such as intermittent bans on the export of Skimmed Milk Powder (SMP), which affects domestic availability and pricing.

⚖️ Regulatory & Governance

Industry Regulations

Subject to FSSAI standards for food safety, ISO 9001:2008, and ISO 22000:2005 certifications. Operations are also influenced by government milk procurement policies.

Environmental Compliance

Not disclosed in absolute INR.

Taxation Policy Impact

The company follows standard Indian corporate tax laws; specific tax rate percentages were not detailed.

Legal Contingencies

The company was classified as 'Non-cooperative' by Infomerics Valuation and Rating Pvt Ltd in 2022 for failing to furnish information required for monitoring ratings. Auditors (H.B. Kalaria & Associates) noted in November 2025 that they did not perform physical verification of inventory or cash, relying solely on management records.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw milk prices and the ability to scale up volumetric sales from new capacity are primary uncertainties, with a potential margin impact of 2-3% based on historical fluctuations.