#5: Dairy, Curing Cancer and Reliance's FMCG Entry
#5: Dairy, Curing Cancer and Reliance's FMCG Entry
Reading till end will help you realise how daily chai can prevent cancer :P
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Breaking & Entering: After doing so in telecom, apparel and packaging, Reliance to trigger serious price war in FMCG
- Aggressive expansion in distribution & GT in a short time as it enters the household goods, home-care, staples and packaged food market
- Partnered or invested in brands to gain access to beverage, biscuits and chocolate segment
- Last week, announced entry into homecare: beauty soaps, detergent, dishwash, toilet & floor cleaners, bars etc.
- Aggressive pricing at entry level price points with standard products (not differentiated)
- These brands already sold in 3000+ reliance’s MT stores and Jiomart
- Entering staples but gaining market share in wheat flour, rice and oils from the likes of ITC & Adani to take time
- Acquired a clutch of small brands; ex. Beverage brand Campa (₹25/bottle) to compete with Coca-Cola (₹31/bottle)
Dairy - Doodh ki nadiya baha denge
-Dairy to be Rs 30 lac crore by 2047.8 cr farmers derive income from dairy.
-India ranks 1st in milk production; 23% of world production.
-Top milk-producing states; UP, Raj, MP, Guj, AP.
-Top milk-producing countries; India, China, Pakistan, Germany, Brazil; 60% of world production.
-Milk prodt in India; 221M tons in FY22; rise of 5% over FY21.
-Exports of dairy products; $471M in FY23. Dairy contributes 5% of the national economy.
-Dairy segmented into; Milk(64%),Emerging value-added products(3%),Traditional Value Added Products(33%).
-40% milk produced is for self-consumption. Per capita daily dairy consumption;427gms.
-60% organized and 40% unorganized. -100% FDI allowed.
-Cow milk 51%, Buffalo milk 45%, Goat milk 3%.
How Vertical SAAS is different from Horizontal SAAS?
- The Horizontal SaaS business makes software for use across all industries; the Vertical SaaS business makes software for a specific industry.
- Companies like Slack, Hubspot, Zoho, can be categorised as Horizontal; While companies like Zenoti, Veeva, Classplus, Khatabook etc. can be categorised as Vertical SAAS.
- Few Advantages of Vertical SAAS:
1) Winner takes most model: Less Competition and hence huge possibilities of becoming market leader
2) Lower CAC: New Customers are similar to existing ones
3) Capital efficient: Due to lower CAC
- Few Challenges of Vertical SAAS:
1) Smaller TAM
2) Mid-market/SMB customer base leading to Smaller ACVs
3) Continuous building of new products to drive growth
4) Exit in terms of IPOs is rare but possible
- Out of ~20 SAAS unicorns from India, Zenoti became the only vertical SAAS company
Policybazaar is on a roll
- Share price has finally staged a turnaround, surging over 67% from an all-time low in November 2022
- PB Fintech’s lending marketplace Paisabazaar is on track to breaking even in Q4FY23
- Revenue from policy renewals is seeing a steady rise
- In Q3FY23, PB Fintech’s revenue rose by two-thirds year-on-year to Rs 610 crore —its highest ever
- CEO Yashish Dahiya attributed the rise in revenues to the “flywheel effect”—where small wins compound, creating a new kind of accelerated momentum.
- In the last 15 years, Policybazaar managed to stave off competition and remained the largest in this space, kicking the virtuous effects of the flywheel in motion
- Like government-backed UPI upended payments, and BSE Star MF changed mutual-fund distribution, a state-backed online marketplace is in the works for the insurance sector. Lets see how does it play out for PB!
Trends in Biotech !
Genomics & Genomic Diagnostics
- AI, genomics and new-age therapies are converging
- Genome sequencing - Process of analysing and understanding the exact order of an individual's DNA
- Helps in early detection of life-threatening diseases like cancer
- Cost of sequencing will continue to drop, making it affordable for masses
Cell & Gene Therapy
- Cell therapy introduces new, healthy cells into a patient's body to treat the diseased cells
- Cells are cultivated or modified outside the body before being injected into the patient
- Aims to treat diseases by introducing, inactivating or replacing genes into cells
- Ability to treat or cure the majority of genetic and rare diseases
- USFDA receives over 200 applications annually
Coal in Cement :
Power & Fuel cost in cement normally forms around 20-25% of cement sales and around 33% of total operating cost. However, after FY21, this cost has increased due to an increase in coal prices.
Coal is a primary source of fuel used in the cement manufacturing process, where it is used to generate the high temperatures required for the chemical reactions that transform raw materials into cement clinker. It is also used in power plants as a fuel to generate electricity.
~1000 kilo calories (kcal) of energy is required to produce 1 ton of cement.
Spoke to one of the cement companies : Their current coal price (per kcal) is Rs 2.30. This price had peaked to Rs 3 in Q1FY23. In FY20, it was less than 1.
Trends Disrupting Automotive Sector - Avoiding Hit Wicket !
- Modern day smartphones are pretty unrecognizable from the analogue bricks we used years back (that reminds me of Nokia 1100). The likes of iPhone & Android have bought us stunning screen with dual sims and cameras. Just like cell phones, the Auto industry is going through an unprecedented era of disruption driven by software & new age technology
- Most frequently reported disruption within the industry is shift towards driverless cars *(Autonomous). Almost every major car company is working towards that including Tesla. Other being Connected Vehicles, Electronics & Shared Mobility along with Artificial Intelligence. Popularly known as *“ACES mega trends”
- Interestingly, modern day car have 100m+ lines of software and that is what driving the disruption in the automotive value chain
Compiled by Hanu Bansal & Tushar Khandelwal
Contributions by Arnim Dhakad, Amay Solanki, Ashish Purohit, Anand Vadia, Mukund Maheshwari, Parin Detroja, Prachi Malpani, Tanay Lohia, Shlok Sanghi, Harshil Shah.
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