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While the acronym “GST” in its present context stands for “Goods and Service Tax”, Dairy Day, a leading ice-cream brand in South India, added a sweetener by rolling out the guava, strawberry and tamarind (in short GST) candies recently to coincide with the landmark GST.
Saurabh Kasat, Chief Finance Officer, told BusinessLine that the company has sold over one million GST series candies since the launch.
Dairy Day forayed into manufacture of fruit candies about a year back with the launch of pineapple candies. “This was made available in select towns. The trials proved encouraging, so we decided to add more flavours,” the CFO said.
The company now anticipates the fruit candies to contribute more than 5 per cent of its revenues. “Our turnover is around ₹150 crore at present. We are targeting to reach ₹500 crore in the next three-four years by strengthening our base and product line across the entire South.”
Established in 2002, the company today manufactures and supplies over 30 ice-cream flavours in formats such as cup, cone, stick, tubs, novelties and so on.
The production capacity of the plant is 1.2 lakh litres per day. “To augment production and strengthen our marketing efforts, we are planning to invest ₹50 crore over the next 12 months. Motilal Oswal – private equity fund – has made an investment of ₹110 crore in the company,” he added.
Asked if the company is looking at the inorganic route to grow, he said: “We don't have any acquisition plans in the near term. However, we will keep the option open and look for interesting opportunities to grow.”
On GST, he said: “Contrary to many sectors getting affected negatively on product price points, the Goods and Services Tax has been positive for us. The rate on ice-cream is 18 per cent, but the various benefits and input tax credit available on most taxes in the GST regime will help bring down the prices. We have taken a call to pass on the benefit to the customer. Now, we can centralise our distribution and keep warehouses only when it makes business sense.”
Dairy Day has a network of 25,000 retailers covering most of the towns in Karnataka and Tamil Nadu.
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