comparative study of organized agri-food businesses in india
TRANSCRIPT
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Comparative Study o Organized Agri-Food Businesses in India
Michael Vinrald Samuel* Mrinalini Shah**
India is the second largest producer of fruits after China with an estimated production of 54.4 million tonnes in 2008.
Indias diverse agro-climatic condition allows production of a wide range of tropical, subtropical and temperate fruits.
Sighting huge business opportunities, retail giants like the UKs Tesco, Frances Carrefour, and American Wal-Mart are
looking to make a foray into the Indian retail market by providing the Indian customer a unique experience of shopping.
Not lagging behind are the Indian cooperatives like Reliance with Reliance Fresh, Aditya Birla Group, ITC, Mahindra &
Mahindra, and Adani Group.
This research has specifically been carried out to understand the present organized agri-food retail sector in India
as well as the objectives, strategies, and financial performances of six existing companies in this business. The research
paper will enable business houses to plan and decide at what level they can venture the present highly fragmented
Indian market.
Introduction
India is the second largest producer of fruits after China
with an estimated production of 54.4 million tonnes
in 2008 (Economic Survey, Ministry of Agriculture,
Govt. of India 2008). Indias diverse agro-climatic
condition allows production of a wide range of tropical,
subtropical and temperate fruits. Indias fruit production
is practised over an area of 3.79 M hectares and
accounts for more than 10 per cent of the worlds total
production, the shares ranging from 4 per cent of citrus
fruits to about 46 per cent of mangoes (MOFPI 2008).
Indias exports of fresh fruit and vegetable reached
Rs 2437.12 crores in 2007-08 (APEDA 2008). Food
processing industry is one of the largest in the country
and has shown a growth rate of 16 per cent in 2008
(MOFPI 2008). Ministry of Food Processing Industries in
India is planning to establish 30 mega food parks with a
subsidy of about $12 million and channelling incoming
FDI across the country. Punjab, Maharashtra, Andhra
Pradesh, Jharkhand, and the North-East Region are thefirst few states the Indian government is considering for
land acquisition ranging from 10 acres to 500 acres for
mega food parks (MOFPI 2008).
A highly fragmented retail sector coupled with
flourishing economy provided an ideal platform for
establishment of organized retailing in India (Economic
Times Intelligence Group 2003). Metropolitan Indians
swiftly shifting lifestyles gave these organized retailers
and supermarkets the critical fecundity to develop and
flourish. In addition to these behavioural changes, the
Indian government revolutionized its policies which
watered down the precincts on overseas ventures for
intercontinental superstore chains to be instituted in India.
Agri-food retailing is a key sector geared to be exploited
as presently this segment is mainly unorganized, besides
being disjointed.
The emerging organized retail sector is expanding
exceptionally with an anticipation of US$ 427 billion by
2010 from US$ 350 billion in 2006 (IBEF 2007). This
unparalleled intensification would primarily impinge
diminutive traders in conjunction with next-door
vendors. Globalization, non-interventionist reforms, and
invigorating pace (8 per cent) of Indian economy have
made the retail majors like the UKs Tesco, Frances
Carrefour, and American Wal-Mart consider foraying
into the currently immature as well as promising
segment by providing the Indian shoppers an inimitable
experience of shopping. Not sheathing behind are the
Indian powerhouses like Reliance with Reliance Fresh,
Aditya Birla Group with more, ITC with e-chaupal,
and Mahindra & Mahindra with Mahindra ShubhlabhServices Limited, (MSSL) to name a few (CRISIL, 2008).
These organized retailers aim precisely to present
the shoppers an improved, in addition to a healthier,
produce at a lower price.
Reliance Industries, Indias leading private
corporation, was one of the initial companies to
establish its own retail chains under the brand name
Reliance Fresh in 2006. Their number of stores soared
from 330 in 2007 to 1,500 by the end of 2008 (CRISIL
2008). During the next few years, Mukesh Ambani,
the billionaire behind the chain, plans to have 4,000
Key words : Agri-Food Supply Chain, Unorganized and Organized Retailing, Business Strategies, New Business
Development, and Company Profiling.
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70 Paradigm l Vol. XIII, No. 2, July - December, 2009
to 5,000 retail outlets double the figure of Tescos
supermarkets within England. These stores are estimated
to swathe in excess of ten million square feet which was
achieved formerly over thirty to forty years in the US and
Europe. Reliance aimed to replace Indias traditional
agri-food supply chain, comprising farmers, middlemen,
wholesalers, retailers, and vendors, with their personal
set of around 500,000 recruits by 2010 (CRISIL 2008).
This study intends to elucidate existing supply chains
of organized agri-food companies in India, business
approaches of existing organized agri-food companies
and an assessment of their pecuniary performances.
Ground survey was carried to identify and map
organized agri-food supply chains. The corporations
were chosen in accordance with their commercial and
pecuniary performances, daton which were obtained
from published annual balance sheets. The study has
been divided into the following three sections:
Discussion on the existing organized agri-food
retail sector in India.
Detailing a few existing organized agri-food retail
companies alongside their business objectives and
strategies in India.
Comparing the financial performance of the
companies considered.
Existing Agri-Food Retail Sector inIndia
To map the echelons of organized agri-food supply
chains the researchers travelled extensively throughout
India. It was established that corporates have ventured
into business at upper and lower levels of existing
unorganized agri-food supply chains. This research
illustrates that organized retailing is a far-fetched dream
in India as agri-food companies are still dependent
upon spot markets to buy and sell their produce (Figure
1). These organized retail companies are operating their
business from:
i. Growers to commission agents and
ii. Commission agents to consumers.
Growers to Commission AgentsForemost agri-food retail chains from growers to
commission agents are Fresh and Healthy Enterprises
Limited (FHEL) (A subsidiary of CONCOR), Adani
Group (with Adani Agri Fresh Limited) and MSSL for
apples. These agri-food retail chains procure fresh fruits
unswervingly from orchards, hoard these, and trade the
same within mandis (spot price markets). These retail
chains maintain cold supply chains throughout the
Leg 1
Growers to
commission agents
Leg 2
Commission agents
to consumers
Whole Saler
Aarhat
Agri-Food
Retail ChainsMashakhar Retailers
Retail Stores
Customer Customer
RetailersOtherMandis Other Cities
Customer
Customer
Grower /
Producer
Normal
TrucksRefrigerated
Trucks
Forwarding
Agent
Agri Food Retail
Chains including
Untifuti, FHEL
and Adani Group
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Comparative Study of Organized Agri-Food Businesses in India 71
shipment. Organized retail chains own CA (controlled
atmosphere) stores which score over conventional CS
(cold stores) as the former controls the entire atmosphere.
The CO2 levels in these stores are contained within
0 to 20 per cent and O2 level is retained between 0
and ambient. The T (Temperature) and RH (Relative
Humidity) are maintained at 2 C and 9095 per
cent respectively (Samuel et. al. 2008). Modified
atmosphere leads to retarding RoR (rate of respiration)
of fruits thereby preserving critical attributes such as the
aura, flavour, and appearance up to six months. These
companies hoard fresh fruits and vegetables for trading
during off seasons. Fresh fruits stored in CA stores score
over those in cold storage as fruits turn soggy and shrink
due to unrestrained high RoR. Introductions of CA stores
have made it possible to in provide better quality fruits
to consumers during off seasons. Organized agri-food
companies ship hoarded fruits to mandis in refrigeratedtrucks across nation and trade the same through
commission agents to wholesalers.
Commission Agents to Consumers
Companies dealing in this part of the supply chain
include Reliance Fresh, Aditya Birla More, Big Bazar,
Spencers, Big Apple, 6-Ten, etc. These retail chains
procure produce from commission agents and supply
directly to consumers through company-operated stores.
Emergence of these retail chains have brought about
significant positive impact upon unorganized retailers in
India as retailers have stopped resorting to malpractices
in terms of weights and quality of produce. Retailers have
begun telephone and door-to-door services in societies
to lure as well as provide conveniences to customers.
These retailers have also begun quoting competitive
prices for customer loyalty.
Existing Agri-Food Retail Companies inIndia:
The study examines a total of six corporations falling inboth halves of the supply chain, i.e.
i. Growers to commission agents and
ii. Commission agents to consumers.
Amongst the studied companies Adani Agri
Fresh Limited, Fresh & Healthy Enterprises Limited,
and Mahindra Shubhlabh Services Limited fall within
the former, while Aditya Birla More, Spencers, and
Subhiksha are in the latter.
Adani Agri Fresh Limited
Adani Group launched their 100 per cent owned
probable causes enunciated were poor post-harvest
management facilities as well as deficient organized
distribution system. The subsequent explanations for
venture were irregular supply of agri-foods within the
domestic markets.
The subsidiary has developed an integrated storage,handling, and transportation infrastructure for fresh fruits
and vegetables across India. Adani Group constructed
CA storage units at three locations (Rewali, Sainz, and
Rohru) in Himachal Pradesh with a combined capacity
of approximately 18,000 Mt to provide consistent quality
of fruits and vegetables throughout the year. Cold supply
chain was considered to increase shelf life of fruits as
well as enhance efficiency of the system. The company
strategized to concentrate on seasonal produce that
were grown far from major consumption markets,
and amendable storage life using modern integrated
cold chain facilities. Superior facilities were thought to
leverage logistics strength in addition to arbitrage price
differential between peak and off seasons.
Fresh & Healthy Enterprise Limited (FHEL)
CONCOR deliberated to capture Indias large
horticultural biodiversity and significant volumes of fruits
and vegetable. As per the industry 30 per cent of the
fruit and vegetable production is lost due to poor post-
harvest management, costing at almost Rs 60,000 cr.
Realizing this potential CONCOR established its fullyowned subsidiary called Fresh and Healthy Enterprise
Limited (FHEL) in February 2006 with Rs 35 crore as
equity from itself. FHEL was set up to create a top-notch
cold chain infrastructure within the country and cold
chain logistics solutions for various stakeholders.
Their first controlled atmosphere (CA) store was set-
up at Rai near Delhi. FHEL intended to develop post-
harvest management facilities including appropriate
handling of produce starting from orchards, during
cold storage, shipment in refrigerated containers, and
distribution, to provide value to consumers. The thoughtbehind was that contemporary cold supply chain will act
as a catalyst for developing a modern, efficient, and
safe food chain to meet rising demands of retail chains.
The company also plans to present customized end-to-
end cold supply chain services from farm gates to end
consumers.
Mahindra Shubhlabh Services Limited (MSSL)
Mahindra Group established Mahindra Shubhlabh in
2000, with an equity stake from International Finance
Corporation (IFC, Washington) with the objective tointegrate agri-food chains from farms to contemporary
retail outlets By 2008 Mahindra Shubhlabh was Indias
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72 Paradigm l Vol. XIII, No. 2, July - December, 2009
Mahindra Shubhlabh is the first Indian corporate to be
awarded EUREPGAP certificate as Primary Marketing
Organization for grapes alongside GLOBALGAP and
TNC certifications. For domestic consumption MSSL
aims to integrate agri-food supply chain for providing
shoppers a healthy and quality produce at cheapest
price.
Aditya Birla Retail Limited
According to Mr Kumar Mangalam Birla, Chairman,
Aditya Birla Group Indian consumer, are underserved
even with existing shopping outlets as these malls are not
providing an international experience to the shoppers
(Business Line 2007). Sighting the above vision, a string
of conveniently positioned local stores were established
within the brand More for fulfilling the needs of Indian
households. The company plans to build direct linkageswith farmers and invest appropriately in backend
infrastructure to ensure the freshest supply of agri-foods
to consumers by connecting households directly to
farmers. The company acquired Trinethra Super Retail in
January 2007. This deal gave More more than half a
million square feet of selling area in addition to a strong
presence in business in the southern states (Business the
Standards, 2007).
Spencers
Spencers has been a part of Indian retail landscape sinceits inception in 1863. Its presence could be experienced
from Peshawar to Cochin and Karachi to Chittagong.
The company was originally owned by Mr John William
Spencer, and later it acquired Indian ownership and
became a division of RPG Group in 1989. As an early
entrant it introduced Indian consumers with organized
retailing, becoming the countrys first agri-food chain
back in 1920. The company embossed and positioned
their brand as Taste the World in order to provide a
wide range of quality products to discerning young
customers as well as delighting shoppers with excellent
ambience and merchandise. Spencers has been able
to provide quality goods and services by continuously
evolving and innovating.
Subhiksha
Subhiksha ventured the sector in 1997 with its foremost
store in Chennai. Within a decade, the administration
began facing trouble with daily operations resulting in
defaults in vendor payments leading to empty stores.
The company started facing major financial crisis by
January 2009 and in February 2009 the managementdeclared closing every part of its 1,600 outlets till further
notification (ICMR 2009) According to the (Financial
Express, 2009) the main reasons for Subhikshas
failure included small-format grocery retailing, lack
of transparency, and liquidity crisis coupled with poor
management.
Agri-ood companies fnancialperormances
The infer sections enunciated existing agri-foodcompanies business in India. In this section the
researchers have measured the financial performances
of companies to access their growth. Figure 2 illustrates
the financial performance measures considered for the
study:
Asset utilization ratios1. Total income / Avg. total assets2. Total income / Compensation
to employees
3. Sales / Avg. GFA (excl. reva-luation, and work in program)4. Sales /Avg. net fixed assets
Working cycle and turnover ratios1. Debtors (Days)2. Creditors (Days)3. Debtors turnover ratio4. Creditors turnover ratio
Turnover (Total Sales)
Total expenses
Proft ater Taxation (PAT)
Gross Fixed Assets(GFA)1. Plant and machinery /
computers / electricalinstallations
2. Other fixed assets
Return ratio (%)1. PAT/Avg. capital
employed2. PAT/Avg. total assets
Proftability ratio (%)1. Profit before Interest, Taxes,
Depreciations and Amortizations(PBDITA) / Total Income
FinancialPerormance
Measures
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Comparative Study of Organized Agri-Food Businesses in India 73
Turnover (Total Sales) and Total Expenses
From figure 3 one can see that the maximum turnover interms of volume has been of Spencers as it possesses itsretail stores providing a range of fast moving consumergood (FMCG) products apart from daily groceries.However, turnover of MSSL and FHEL are relatively low
as the two companies are present only in back-endsupply of fresh agri-foods. Total expenses (Figure 4) ofcompanies are not only proportionate to total sales butsurprisingly are more. By analysing the two figures onecomes across that all companies are incurring heavy
losses in business.
Figure 7: Plant and machinery / computers / electricalinstallations costs (Rs crores) for considered companies
Figure 3: Turnover (Rs crores) for considered companies
Figure 4: Total expenses (Rs crores) for consideredcompanies
Figure 5: Profit after Taxation (Rs crores) for consideredcompanies
Fi 6 G Fi d A (R ) f id d
Figure 8: Other fixed costs (Rs crores) for considered
companies
Proft ater Taxation (PAT)
Figure 5 compliments the above justification by
noticeably portraying PAT in negative. However, by
comparing Figures 3 and 5 one can notice that highturnovers have led to heavier losses.
Gross Fixed Assets
Spencers, Adani Agri Fresh, and FHEL have gradually
built their assets (Figure 6) including plant and machinery,
computers, and electrical installations (Figure 7) in
addition to other costs (Figure 8). A part of PAT may be
explained from fixed assets. However, the next few years
will be critical for these companies as further losses will
result into a catastrophe with fixed assets acting as a
catalyst.
Asset Utilization Ratio
Asset utilization ratio (Figure 9) has been made known
to comprehend growth of the companies. A momentous
dip in asset utilization ratio has been noticed which is
alarming as these trends are universal for all companies.
Asset utilization ratio was further divided in order to
isolate the cause. However, it is observed that trends are
cross-functionally similar, i.e. human resource (Figure
10), operations (Figure 11), and net fixed assets (Figure
12).
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74 Paradigm l Vol. XIII, No. 2, July - December, 2009
Figure 9: Asset utilization ratios (Total income / Avg.
total assets) for considered companies
Return Ratio
Trends for return ratio were quite similar to profitability
ratio both in terms of average capital employed (Figure
14) as well as total assets (Figure 15). Quick corrective
strategies are required for Spencers and FHEL as these
figures will not permit them to survive for long.
Figure 10: Asset utilization ratios (Total income /
Compensation to employees) for considered companies
Figure 11: Asset utilization ratios (Sales / Avg. GFA (excl.
reval. & WIP)) for considered companies
Figure 12: Asset utilization ratios (Sales /Avg. net fixed
assets) for considered companies
Proftability Ratio
From Figure 13 one observes a positive trend towards
profitability for MSSL. Whereas a dip of fortunes forSpencers and FHEL. Not a single company is generating
profit which evidently indicates that all companies have
Figure 13: Profitability ratio (%) (PBDITA/ Total Income)for considered companies
Figure 14: Return ratio (%) (PAT/Avg. capital employed)
for considered companies
Figure 15: Return ratio (%) (PAT/Avg. total assets) for
considered companies
Figure 16: Working cycle and turnover ratios (Debtors)
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Comparative Study of Organized Agri-Food Businesses in India 75
Working Cycle and Turnover Ratio
Working cycle and turnover ratio in terms of cycle
(days) for debtors and creditors (Figures 16 and 17)
were found to be alarming for MSSL. However, debtors
(Figure 18) as well as creditors (Figure 19) turnover ratios
were observed at endurance levels for all consideredcompanies.
costing Rs 177.79 crores. However, over the years their
total sales have only been Rs 26.4 crores with total
expenses to the magnitude of Rs 43.97 crores (Table
1). The total profit after taxation was Rs ()17.56 crores
for the financial year (20078). Figure 20 unlocks an
array of questions which the company management
might find hard to explain in terms of strategies as well
as investments.
Fresh & Healthy Enterprises Ltd. (FHEL)
FHEL being a subsidiary of CONCOR has invested in
two phases in their fixed assets (Figure 3). In financial
year 20067 they spent Rs 54.29 crore and in 20078
Rs 82.61 crore. They have constructed a CA store in
the outskirts of Delhi at a place called Rai. FHEL have
considerably increased their sales from Rs 4.76 crore in
2007 to Rs 16.3 crore in 2008 (Table 1). Though thesales volume has increased four times the expenditure
has increased nine times from Rs 5.1 crore in 2007
to Rs 47.46 crore in 2008 leading to net profit of Rs
()82.61 crore. The management of FHEL needs to
justify the phenomenon of reduction in profits with
increase of sales volumes, as well as how they will
recover high amount invested for fixed asset (Figure 21).
Asset utilization ratio in terms of total income has been
quite low at 0.2, but is good in terms of compensations
to employees 16.32. Sales compared to net as well as
gross fixed assets is quite low at 0.39 and 0.24 in 2008
(Table 1). The profitability ratio is 62.67 and return
Figure 17: Working cycle & turnover ratios (Creditors)
(Days) of considered companies
Figure 18: Working cycle & turnover ratios (Debtors
turnover ratio) (Credit Sales/ Average debtors) of
considered companies
Figure 19: Working cycle & turnover ratios (Creditors
turnover ratio) (Credit Purchased/ Average creditors) of
considered companies
Discussion and Conclusion:
Brie assessment o companies based onperormance measures
Adani Agri Fresh Limited
Adani Agri Fresh invested heavily on fixed assets (Figure
Figure 20: Comparative graph between (Gross FixedAssets/ Total Sales/ Total expenses/ Profit after Taxation)
(Rs crore) for Adani Agri Fresh Limited
Figure 21: Comparative graph between (Gross Fixed
Assets/ Total Sales/ Total expenses/ Profit after Taxation)
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76 Paradigm l Vol. XIII, No. 2, July - December, 2009
ratios are also negative at 24.04 and 20.67 in terms
of capital employed and assets for 2008. Working cycle
and turnover ratio are high in terms of debtors (34.14
days) as well as creditors (98.85 days).
Spencers Retail Limited
Spencers and chiefly involved in front-end retailing
having chain of retail stores throughout India. They have
maximum fixed assets worth of Rs 515.26 crore (Table
1) followed by Adani Agri Fresh with Rs 177.79 crore.
The sales revenue has increase from Rs 90.76 crore
in 2005 to Rs 855.62 crore in 2008. With increased
sales volumes, expenditures have also increased from
Rs 98.81 crore in 2005 to Rs 1063.10 crore in 2008
(Figure 22). However, profit after taxation reduced
from Rs ()3.14 crore to Rs ()89.31 crore during
20058. Amongst all the companies considered in the
study Spencers have the maximum sales, expenditure,
PAT, and gross fixed asset. The asset utilization ratio
(total income/avg. total assets) in terms of total assets
has considerably decreased from 4.02 in 2005 to
1.48 in 2008. The asset utilization ratio in terms of
compensations to employees is downwards from a high
of 19.13 in 2005 to 10.59 in 2008. Sales compared to
net as well as gross fixed assets has reduced significantly
from 7.62 and 8.72 in 2005 to 3.52 and 2.68 in 2008
(Table 1). The profitability ratio at ()12.84 is least for its
class and return ratios have reduced substantially from
()21.00 to ()72.99 and ()13.15 to ()15.36 from2005 to 2009 for capital employed and assets. Working
cycle and turnover were found to be comparatively low
at 9.21 days for debtors and 64.87 days for creditors
in 2008. However, figures of creditors and debtors
increased considerably from 3.31 days and 42.87 days
in 2005 to 9.21 days and 64.87 days in 2008 (Table 1).
Figure 23: Comparative graph between (Gross Fixed
Assets/ Total Sales/ Total expenses/ Profit after Taxation)
(Rs crore) for Aditya Birla Retail Limited
Mahindra Shubhlabh Services Ltd. (MSSL)
MSSL has the lowest fixed assets worth Rs 2.45 crore
(Table 1) followed by FHEL with Rs 82.61 crore. The
sales revenue has increased from Rs 12.38 crore in2005 to Rs 37.38 crore in 2008. With increase in
sales volumes, expenditures have also increased from
Rs 19.41 crore in 2005 to Rs 52.32 crore in 2008.
However, profit after taxation increased from Rs. ()6.06
crore to Rs ()1.86 crore from 2005 to 2008. All the
companies considered in the study are running into
losses but still MSSL leads them with the best figures of
Rs()1.86 crore (PAT). The asset utilization ratio in terms
of total income has been low at 1.1, but is good in terms
of compensations to employees at 12. Sales compared
to net as well as gross fixed assets is high at 15.54 and
22.79 respectively for 2008 which is the highest in thelot (Table 1). The profitability ratio is good at 1.46
and return ratios are comparatively good at values of
()13.78 and ()5.22 in terms of capital employed and
assets for 2008 (Figure 24). Working cycle and turnover
ratio are highest in terms of debtors at 147.05 days as
well as creditors 190.21 days which the management
needs to introspect.
Figure 22: Comparative graph between (Gross Fixed
Assets/ Total Sales/ Total expenses/ Profit after Taxation)
(Rs crore) for Spencers.
Aditya Birla Retail Limited
Aditya Birla More is still premature and has a long
way to go. With only one years performance it is notpossible to assess or conclude their performance (Figure
23) The company management believes they can excel
Figure 24: Comparative graph between (Gross Fixed
Assets/ Total Sales/ Total expenses/ Profit after Taxation)
(Rs crore) for Mahindra Shubhlabh Services Limited
The research enables to understand the existing
organized agri-food retail sector in India as well as theobjectives and financial performances of six existing
i Fi i l t t t f id d i f d
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Comparative Study of Organized Agri-Food Businesses in India 77
sustainability, and profitability over the next decade
(Table 2). While concluding, considering the present
pecuniary situation of the companies considered, one is
compelled to think Are organized agri-food companies
really a threat to unorganized agri-food sector in India,
or based on their financial performances they will meet
the same fate as Subhiksha?
Reerences
APEDA (2008), Annual Report, Agricultural and
Processed Food Products, New Delhi Export Development
the Authority, Ministry of Commerce and Industry,
Government of India, pp. 22730.
Business Line (2007), Aditya Birla Retail Plans Rs 9,000-
cr rollout, Aditya Birla press release, 19 May, 2007.
Business Standards (2007), Trinethra acquisition givesBirlas the upper hand, press release, 4 January, 2007.
CRISIL (2008), Annual Retailing Review, Crisil Research,
pp. B5566.
Government of India, (2008), Economic Survey 2008,
New Delhi: Ministry of Agriculture, Government of India.
Economic Times Intelligence Group (2003),
Changing Gears: Retailing in India, Economic that
Times Knowledge Series, Mumbai: Economic Times
Intelligence Group.
Financial Express (2009), Small-format retail biz model
failed Subhiksha, Company Information, 5 March,2009.
ICMR (2009), Subhiksha: An Indian Retailer in Trouble,
Center for Management Research, Case Code:
BSTR333.
IBEF (2007), India Brand Equity Foundation, Ministry of
Commerce & Industry, Government of India, New Delhi
MOFPI (2008), Visions, Strategy and Action Plan for
Food Processing Industries, New Delhi: Ministry of that
Food Processing Industries, Government of India.
Samuel, M.V., B.S. Sahay, and M. Shah, (2008), A CaseStudy on Cost Optimization of Apple Supply Chain,
Redefining Business Horizons, New Delhi: Macmillan
Publishers India Ltd., pp. 15967.
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78 Paradigm l Vol. XIII, No. 2, July - December, 2009
e1:Fin
ancialperormanceoconsideredcompanies(Datacompiledrom
vario
uspublished
sources)
C
ompany
Sales
(crores)
Total
expenses
(crores)
Proft
ater
Taxation
(PAT)
(crores)
Gross
Fixed
Assets
(GFA)
(crores)
Plant&
machinery
(crores)
Overall
Fixed
Assets
(OFA)
(crores)
Total
income/
Avg.total
assets
Total
income/
Compen-
sationto
employees
Sales/
Avg.GFA
Sales/Avg.
netfxed
assets
PBDITA/
Total
income
PAT/Avg.
capital
employed
PAT/Avg.
total
assets
Debtors
(Days)
Creditors
(Days)
Debtors
turnover
ratio
Creditors
turnover
ratio
-05
Adani
-
-
-
0.5
0.0
7
0.0
5
-
-
-
-
-
-
-
-
-
-
-
-06
Adani
-
-
-
33.9
7
0.1
8
0.1
1
-
-
-
-
-
-
-
-
-
-
-
-07
Adani
-
-
-
1
53.2
6
2.5
1.4
5
-
-
-
-
-
-
-
-
-
-
-
-08
Adani.
26.4
43.9
7
17.5
6
1
77.7
9
98.3
50.0
8
0.1
4
4.2
9
0.2
5
0.1
6
41.3
8
11.1
9
9.2
0
45.6
25
122.2
5
8
12.5
0
-04
Aditya
Birla
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-05
Aditya
Birla
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-06
Aditya
Birla
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-07
Aditya
Birla
-
33.1
7
31.7
7
12.8
8
5.7
3
-
-
0.0
9
-
-
-
9.6
0
9.4
3
0
119.2
3
0
3.1
2
-08
Aditya
Birla
-
-
-
-
-
-
-
-
-
-
3117
-
-
-
-
-
-
-07
FH
EL
4.7
6
5.1
0.1
9
54.2
9
0.0
5
0.0
2
0.0
9
13.2
7
18.3
1
0.1
8
2.2
4
0.3
7
0.3
3
0
840.0
0
0
122.8
5
-08
FH
EL
16.3
47.4
6
18.1
4
82.6
1
44.8
3
16.7
1
0.2
16.3
2
0.3
9
0.2
4
62.6
7
24.0
4
20.6
7
34.1
4
98.8
5
10.6
8
65.0
8
-04
M
SSL
12.4
6
19.4
1
6.0
6
2.0
6
0.3
8
0.0
4
1.6
5
4.8
5
5.7
6.9
4
-32.1
9
115.6
4
56.0
5
41.0
1
64.3
8
8.9
9.4
8
-05
M
SSL
20.7
8
26.2
2
2.6
8
2.0
7
0.3
7
0.0
4
2.1
2
10.5
1
10.0
6
12.9
5
5.3
4
38.8
6
22.7
6
31.2
6
57.5
2
11.6
7
10.9
-06
M
SSL
14.6
1
24.4
4
3.7
5
2.1
5
0.4
1
0.0
5
1.2
3
8.2
9
6.9
2
9.5
5
18.0
9
74.8
5
29.4
0
75.5
7
138.0
4
4.8
2
3.8
9
-07
M
SSL
27.5
3
30.7
3
1.3
2
2.3
6
0.5
8
0.0
5
1.3
3
10.5
12.2
1
17.4
2
1.9
6
19.8
7
6.2
9
112.6
2
173.4
8
3.2
4
2.5
4
-08
M
SSL
37.3
8
52.3
2
1.8
6
2.4
5
0.6
9
0.0
5
1.1
12
15.5
4
22.7
9
1.4
6
13.7
8
5.2
2
147.0
5
190.2
1
2.4
8
2.6
5
-04
Sp
en-
ce
rs
90.7
6
98.8
1
3.1
4
16.7
6
8.3
0
4.0
2
19.1
3
7.6
2
8.7
2
1.0
2
21.0
0
13.1
5
3.3
1
42.8
7
110.0
1
11.2
2
-05
Sp
en-
ce
rs
138.3
2
147.7
5
9.0
6
22.6
4
11.4
6
0
4.1
3
16.4
6
7.3
4
8.6
3.7
5
44.3
6
26.9
9
3.1
2
37.4
6
116.7
2
10.5
9
-06
Sp
en-
ce
rs
290.6
3
335.4
3
15.5
4
71.4
6
33.8
6
0
3.3
13.9
2
7.0
3
7.6
5
3.3
2
37.4
7
17.6
2
5.3
8
74.5
7
67.8
2
7.3
1
-07
Sp
en-
ce
rs
539.8
3
617.0
8
52.3
4
1
88.3
4
74.2
6
0
2.5
8
12.4
1
5.8
4.8
3
7.1
0
45.6
9
25.0
1
6.8
8
64.6
0
53.0
0
6.1
8
-08
Sp
en-
ce
rs
853.6
2
1063.1
89.3
1
5
15.2
6
198.8
8
0
1.4
8
10.5
9
3.5
2
2.6
8
12.8
4
72.9
9
15.3
6
9.2
1
64.8
7
39.6
2
6.5
2
-04
Su
bhik-
sh
a
216.5
6
219.7
2
2.5
8
20.2
1
9.2
1.2
3
4.7
7
80.8
7
12.1
4
15.8
3.9
1
10.5
5
5.5
5
0.5
4
4.4
9
666.3
3
107.8
9
-05
Su
bhik-
sh
a
278.1
3
282.4
7
5.1
7
23.3
10.6
6
1.5
7
3.9
4
72.2
9
12.7
8
18.2
4
4.8
7
11.3
9
7.2
4
0.7
0
3.5
4
515.0
5
126.5
9
-06
Su
bhik-
sh
a
334.9
8
357
6.1
1
89.1
2
16.0
9
1.6
9
2.1
4
82.9
9
10.7
4
7.1
4.9
5
5.6
2
3.8
4
0.4
5
23.2
8
797.5
7
27.3
6
-
8/2/2019 Comparative Study of Organized Agri-Food Businesses in India
11/12
Comparative Study of Organized Agri-Food Businesses in India 79
e2:Comparativegrowthindicatorsoconsideredagrioodcompanies
.
FinancialPerormance
Measures
CompanyNames
Ad
aniAgriFreshLtd.*
FHEL*
MSSL*
Spencers*
Total
Sales(Crores)
Verylow
ascomparedtogross
fixedas
sets
Verylowa
scomparedtogross
fixedassets
60%oftotalexpenses
80%oftotalexpenses
Total
expenses(Crores)
Almost
doubletototalsales
Morethan
doublethetotal
sales
Muchhigherthantotalsales
Muchhigherthangrossfixed
assets
PAT(Crores)
Thecom
panyincurredalossof
-17.5
6
crores.
Thecomp
anyincurredalossof
-18.1
4crores.
Thecompan
yincurredalossof
-1.8
6crores
.
Thecompanyincurredaheavy
lossof-8
9.3
1
crores.
GFA(Crores)
Tenfold
stototalsales
Veryhigh
ascomparedtototal
sales
Extremelylowascomparedto
totalsales
Veryhighasco
mparedtototal
sales
Plant
&machinery
Critical
at98.3
%
Highat44.8
3%
Verylowat0.0
69%
Criticalat198
.88%
OFA
Highat
50.0
8%
Moderate
at16.7
1%
Verylowat0.0
5%
Figuresnotavailable
AssetUtilizationRatio
Total
income/Avg.
totalassets
Verypo
or
Poor
Good
Poor
Total
income/Compensation
toem
ployees
poor
Poor
VeryGood
Poor
Sales
/Avg.
GFA
Verypo
or
Poor
VeryGood
Poor
Sales
/Avg.
netfxedassets
Verypo
or
Poor
ExtremelyGood
Poor
ProftabilityRatio(%)
PBDITA/Totalincome
Compa
nyisincurringheavy
losses
Company
isincurringheavy
losses
Companyis
incurring
losses
Companyisin
curring
losses
ReturnRatio(%)
PAT/A
vg.
capitalemployed
Compa
nyisincurringheavy
losses
Company
isincurringheavy
losses
Companyis
incurring
losses
Companyisin
curring
losses
PAT/A
vg.
totalassets
Compa
nyisincurringheavy
losses
Company
isincurringheavy
losses
Companyis
incurring
losses
Companyisin
curring
losses
Work
ingcycle&turnoverratios
Debtors(Days)
Gooda
t45days
Goodat34days
Extremelypo
orat147days
Terrificallygoo
dat9days
Creditors(Days)
Good
Good
Extremelypo
orat190days
Extremelygoodat65days
Debtorsturnoverratio
Quitelowwhichisextremely
goodfo
rthecompany
Quitelow
whichisextremely
goodforthecompany
Quiteloww
hichisextremely
goodforthe
company
Surprisinglyhighwhichis
criticalforthecompany
Creditorsturnoverratio
Quitelowwhichisextremely
goodfo
rthecompany
Quitehighwhichisextremely
criticalfor
thecompany
Quiteloww
hichisextremely
goodforthe
company
Lowwhichisextremelygood
forthecompany
-
8/2/2019 Comparative Study of Organized Agri-Food Businesses in India
12/12
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