Analysis: Vadilal Industries Ltd

The current section of the “Analysis” series covers Vadilal Industries Ltd, a leading Indian ice-cream manufacturer with the brand “Vadilal”. The company also deals in frozen foods under the “Vadilal Quick Treat” brand.

Please note that to get maximum benefit from this article, an investor should focus on the process of analysis instead of looking for good or bad aspects of the company. She should learn the interpretation of diverse types of data and transactions, and pay attention to the parts of annual reports etc., used to get the information. This will help her improve her stock analysis skills.

Vadilal Industries Ltd: Detailed Fundamental Analysis

Over the years, Vadilal Industries Ltd has incorporated multiple subsidiaries, both within India and overseas. As a result, it has reported both standalone as well as consolidated financials.

On March 31, 2025, the company had 5 subsidiary companies. Q4-FY2024 results, page 14:

1. Vadilal Industries (USA) Inc.
2. Vadilal Industries Pty Ltd
3. Vadilal Delights Limited
4. Varood Industries Limited
5. Ambica Ice & Cold Storage Co.

We believe that while analysing any company, an investor should always look at the company as a whole and focus on financials, which represent the business picture of the entire company, including its subsidiaries, joint ventures etc. Consolidated financials of a company present such a picture. Therefore, if a company reports both standalone as well as consolidated financials, then the investor should prefer the analysis of the consolidated financials of the company.

As a result, while analysing the past financial performance of Vadilal Industries Ltd, we have analysed its consolidated financials.

Further recommended reading: Standalone vs Consolidated Financials: A Complete Guide

With this background, let us analyse the financial performance of Vadilal Industries Ltd.

Financial and Business Analysis of Vadilal Industries Ltd:

In the last 10 years (FY2015-FY2025), the sales of Vadilal Industries Ltd have increased at 12% year on year, from ₹450 cr in FY2015 to ₹1,215 cr in FY2025.

Over the years, the operating profit margin (OPM) of Vadilal Industries Ltd has been very volatile in the range of 8% to 20%. The net profit margin (NPM) of the company has also shown similar sharp fluctuations and has fluctuated between 0.6% to 13%.

The fluctuations in the business performance of Vadilal Industries Ltd become more obvious when an investor analyses its financial performance over the last 30 years, from FY1996 to FY2025, as shown in the table below:

Over the years, the company’s profit margins have seen large fluctuations in a cyclical manner, where at times, it even reported losses. It used to have an NPM of 6% in FY1996, and it declined into losses in the 15 months ending in Dec-1999 and Mar-2001. Thereafter, the company could reach an NPM of 5% in FY2007, only to see it decline to 0.7% in FY2009. NPM increased to 3% in FY2010, only to decline to 0.5% in FY2015. Subsequently, NPM increased to 7% in FY2020 and thereafter, again declined to 1% in FY2021.

It is only in the recent two years (FY2024 and FY2025) that Vadilal Industries Ltd has seen NPM in double digits.

To understand more about Vadilal Industries Ltd along with fluctuations in its profit margins, an investor needs to read the publicly available documents of the company like its annual reports from FY1997 available on BSE Ltd, credit rating reports from CARE from 2015, and India Ratings from 2019, its corporate announcements submitted to Bombay Stock Exchange (BSE) and orders of National Company Law Tribunal (NCLT) etc.

The above-mentioned documents show that the following key factors have influenced the business of Vadilal Industries Ltd, which are critical to understand for any investor.

1) Intense competition in the ice cream as well as frozen foods industry:

Both major business divisions of Vadilal Industries Ltd, ice cream and frozen foods, face intense competition from both organised and unorganised segments.

In the ice cream segment, the company faces competition from both Indian and multinational brands like Amul, Kwality Walls, Havmor, Naturals and Baskin-Robbins as well as numerous unorganised players active in local markets.

Credit rating report by India Ratings, April 2025:

The ice cream industry is highly fragmented and is characterised by intense competition. The company faces stiff competition from both local unorganised players and established brands such as Amul, Kwality Walls, Havmor, and Baskin & Robbins, which limits its growth potential.

In fact, local unorganised players dominate the Indian ice cream market, which poses big obstacles for Vadilal Industries Ltd.

Credit rating report by CARE, August 2017, page 2:

Indian ice-cream market is largely dominated by unorganised players. There are large numbers of big and medium ice-cream companies in India and innumerable small and seasonal companies doing business.

Similarly, the company faces strong competition for its frozen food products as well in both domestic as well as export markets, especially from the unorganised sector.

FY2014 annual report, page 32:

The unorganized sector comprising unbranded frozen products remains the biggest challenge to the organized sector of branded frozen food products

Additionally, in the export market, Vadilal Industries Ltd faces intense competition from countries like China, Thailand, Vietnam and the Philippines, where producers get government support and subsidies as well as access to cheaper raw material.

FY2006 annual report, page 9:

Company is facing stiff competition from China. Owing to mass production and various Government subsidies, their cost of production is very low as such they are very competitive in the market as compared to India

FY2008 annual report, page 12:

we can not afford to ignore countries such as Thailand, Vietnam & Phillipines, offering competitively priced pineapple and other fruit products. Even the countries from South American subcontinent, engage in volume production of frozen fruits.

Moreover, the company also faces competition from private labels of departmental stores in the frozen food segment that take away its market.

FY2013 annual report, page 22:

The existence of private labels, especially in Europe where they constitute around 40% of the total frozen foods market, is the major factor restricting the growth of the market.

Additionally, Indian frozen food products face high import duties in developed markets, which puts them at a disadvantage compared to players from other countries.

FY2007 annual report, page 20:

Indian food products are subject to higher import duty in Europe and America, whereas products from East Europe and Central America are either exempted or attract lower rate of import duty.

Apart from competition from other players, the frozen foods market also faces disadvantages on account of fake news and people’s beliefs that, at times, are not true. For example, during COVID, many consumers thought that ice cream and frozen food should not be eaten.

FY2020 annual report, page 43:

Fake news that are spread by invalidated reports without being fact checked has been the biggest concern for our industry. During the early days of COVID19, baseless rumors got spread that ice-creams and frozen food shouldn’t be consumed.

Many consumers believe that frozen food is inferior to fresh food and, as a result, do not buy frozen food, limiting the growth of its market.

FY2022 annual report, page 22:

To some consumers, frozen food is thought of as a product that is an inferior substitute for fresh food, which is one of the major concerns for this market.

Therefore, an investor would appreciate that Vadilal Industries Ltd faces intense competition from both Indian and foreign organized players, as well as unorganized, private label products that restrict its growth prospects.

Over the years, the company has lost its ice cream market share to its competitors. In FY2002, Vadilal Industries Ltd used to command a 20% share of the organized ice cream market.

FY2002 annual report, page 7:

Vadilal as a brand commands 20% share of the total organized market.

By 2019, the market share of the company had become almost half, to about 10% of the organized ice cream market.

FY2019 annual report, page 28:

Brand Vadilal has a 10% of organized market share against total organized Indian ice cream market

It is advised that an investor should be cautious about the intense competition in the ice cream and frozen foods markets when she projects the performance of Vadilal Industries Ltd.

Also read: How to do Business Analysis of a Company

2) Very low pricing power of Vadilal Industries Ltd:

Due to the presence of a large number of suppliers, both from organized and unorganized sectors, in both the ice cream and frozen food segments, consumers always have a lot of options to choose from. As a result, Vadilal Industries Ltd is not able to command any pricing power over its customers.

Players from unorganized sector in the ice cream division sell products at a very low price when compared to organized players, leading to intense pricing pressure on branded/organized players.

FY2024 annual report, page 19:

ice cream industry has a vast unorganized market that works at low costs and margins. These unorganized players pose the biggest challenge and are a competition to the big players.

FY2015 annual report, page 30:

The market is flooded with new local and regional players with cheaper and shoddy product options

Due to intense competition, Vadilal Industries Ltd faces challenges in passing on the increase in raw material prices to its customers and, in turn, has to take a hit on its profit margins, leading to cyclically fluctuating profit margins as seen in its 30-year financial history, as shown above.

Credit rating report by CARE, January 2024:

rating strengths are, however, tempered by…susceptibility of profitability to volatile raw material prices, seasonality associated with the business and high competition in the ice-cream segment from the organised as well as unorganised segments.

In the international market for frozen foods, unorganized players from both India and China put intense pricing pressure on Vadilal Industries Ltd.

FY2014 annual report, page 34:

Another major concern is the growing numbers of unorganized players from Indian and countries like China. These players are always focused on short term gains are only concerned about momentary sales. Hence, they disturb the market by offering rates that are below par as compared to market trends. This makes it difficult for the organized players to remain competitive in terms of rates despite of having far superior quality products

Due to a lack of pricing power in the frozen foods segment, Vadilal Industries Ltd frequently faces losses in this division.

Credit rating report by CARE, August 2017, page 1:

ratings also remain constrained due to continued weak operational and financial performance of VIL’s frozen food business with significantly low capacity utilization and negative profitability…frozen food division continued to report operating and net losses and losses widened during FY17 over FY16.

The lack of pricing power of Vadilal Industries Ltd has been a long-standing issue, as during the years 1999 and 2001, when the company reported overall net losses, it was due to a lack of pricing power in the face of intense competition. In FY1999, the company could not pass on the increase in excise duty to its customers and suffered losses.

FY1999 annual report, page 9:

in view of increase in excise duty on ice-cream as well as sale of ice-cream being sold by competitor at a very low price and cut-throat competitions being faced by the Company from major domestic players, the profitability of the Company in ice-cream business has been affected adversely as the Company could not increase the selling price inspite of increase in the excise duty as well as increase in prices of various raw materials and packing materials.

In FY2001 as well, despite a strong increase in input costs, Vadilal Industries Ltd could not increase its prices and had to suffer losses.

FY2001 annual report, page 8:

ice-cream market in the recent past has been characterised by repeated hikes in excise duty, entry of low priced products by major domestic players. In addition, local brands have also mushroomed. Consequently there was no scope to pass on the higher costs of excise, raw materials, packing materials, etc. to the consumer, thus resulting in squeezed operating margins and lower profitability. As such, the Company has once again attempted to hold its price line so as to boost volumes.

In the later years as well, there have been many periods when the company suffered a decline in profits due to intense competitive pressures and a lack of pricing power, like FY2007 to FY2009 and FY2012 to FY2015.

In FY2017, when prices of its key raw materials, sugar, milk and palm oil increased, the company faced a decline in its operating profit margins.

Credit rating report by CARE, August 2017, page 2:

PBILDT margins however declined during FY17 on account of increase in input costs of sugar, milk and palm kernel oil (these three constitute 65% of the total raw material costs during FY17).

An investor should keep in mind the low pricing power of Vadilal Industries Ltd before she projects its recent increase in profit margins into the future.

Also read: How to analyse New Companies in Unknown Industries?

3) Strategies adopted by Vadilal Industries Ltd to beat competition and protect its profitability:

Over the years, the company has adopted various strategies to stay profitable and competitive in the tough business scenario.

3.1) Increase in the size of the business to benefit from economies of scale:

One of the strategies adopted by Vadilal Industries Ltd to sustain intense price-based competition is to keep its costs in check by utilizing economies of scale. Over time, the company has increased the size of its business significantly from a total revenue of ₹51 cr in FY1996 to ₹1,238 cr in FY2025.

To increase the scale of business, it made significant investments in its plant & machinery to increase its production capacity as well as improve its technology.

For example, the company expanded its factories in FY2015.

FY2015 annual report, page 27:

To increase the production capacity and to have better automation, we had undertaken expansion-cum-modernisation project of the factories, which has been successfully completed.

Before it, during FY2010-FY2013 had undergone another round of capital investment to expand its capacity.

FY2010 annual report, page 17:

Company is planning to make further expansion cum modernisation of its ice-cream manufacturing units situated at Pundhra and Bareilly. This will result in enhancement of existing production and storage capacity and automation of its existing manufacturing facilities.

In FY2011, the expansion was nearing completion.

FY2011 annual report, page 16:

To increase the production capacity and to have better automation, the Company has undertaken expansion-cum-modernisation project of its aforesaid Ice- cream factories, which is near completion.

The said expansion was completed in FY2013.

FY2013 annual report, page no. 21:

Company has undertaken expansion-cum-modernisation project of its aforesaid Ice-cream factories, which has been successfully completed.

Before FY2010-FY2013, the company had expanded its production capacities in FY2006-FY2008.

FY2006 annual report, pages 7-8:

Company has decided to expand processing facilities at Dharampur plant at Valsad…Company has an adequate manufacturing capacity…at its Dharampur plant, due to shortage of storage capacity, it is difficult to increase production capacity…which incurs heavy transportation cost.

FY2007 annual report, page 19:

Company has recently embarked upon expansion- cum-modernization of its existing ice-cream manufacturing plant situate at Bareilly and Pundhra.

The expansion projects were completed in FY2008, and the company could offer its products at competitive prices to consumers.

FY2008 annual report, page 10:

With major expansion in both the Pundhra & Bareilly plant, there has been increase in production capacity to cater to the needs of the markets.

Dharampur Plant. The 2000 MT cold storage has become operational very recently…frozen products can now be offered at more competitive prices due to reduced transportation costs.

Regular expansion of its manufacturing facilities is an essential part of staying competitive for Vadilal Industries Ltd. Previously, in FY1998, the company did a major expansion when it set up a new ice cream manufacturing plant at Pundhra, Gandhinagar. Also, it expanded its capacity in Bareilly, Ahmedabad and Dharampur plants.

FY1998 annual report, page 11:

The Company is setting up a new Ice-cream manufacturing plant at Village Pundhra

your Company is installing additional machinery at its existing ice-cream plants at Dudheshwar, Ahmedabad and Bareilly

Expansion of Processed Foods Division – Company is installing balancing equipment and a preparatory line…of the Processed Food Division at Dharampur, Dist. Valsad (Gujarat)

Under pressure from intense competition, the company seemed to focus on expanding capacities to lower costs of production and using better technology. By FY2011, the company had many firsts in its name, like the fastest cone-making machine in India.

FY2011 annual report, page 16:

Vadilal has just set up India’s fastest cone-making machine…which will make 18,000 cones per hour.

On multiple occasions, the company benefited from its increasing scale of operations by an improvement in profitability. For example, in recent years, from FY2022 to FY2025, its profit margins increased due to an increase in business size.

Credit rating report by CARE, October 2023, page 2:

PBILDT margin also improved by 138 bps Y-o-Y…with benefit derived from growth in scale of operations.

Credit rating report by India Ratings, April 2025:

EBITDA margins improved to 19.6% in FY24…and further to 22.1% in 9MFY25…supported by…better absorption of fixed costs resulting from revenue growth

Also read: Credit Rating Reports: A Complete Guide for Stock Investors

However, whenever the company starts benefiting from scale benefits, the intense competition from low-priced players soon catches up, and the company has to let go of its benefits by reducing prices.

FY2003 annual report, page 14:

All the benefits accruing out of the economies of scale (in procurement and production) were passed on to the consumer in the form of value for money offers like “Buy One Get One Free”

Therefore, an investor should be cautious while assessing the sustainability of Vadilal Industries Ltd’s improvement in profit margins due to the increasing size of revenue, as the industry scenario is highly competitive.

3.2) Large spending on advertisements:

The company’s products are a non-essential discretionary spending for the consumer in a segment where she is spoilt for choice. As a result, Vadilal Industries Ltd has to continuously keep spending money on marketing, advertisement and promotions to stay in the minds of consumers. Otherwise, competing brands will take consumers away.

Historically, the company has been one of the largest advertisers in India.

FY2008 annual report, page 11:

Company is among the frontiers and maximum spender on News paper advertisement all over India. This spending actually surpasses the annual advertising budget of some of the regional players.

Over the years, Vadilal Industries Ltd has hired famous stars as its brand ambassadors like Parineeti Chopra (2016), Ranveer Singh (2022), Alia Bhatt (2024) etc. All these have been among the most prominent Bollywood stars, indicating high brand promotion charges paid by Vadilal Industries Ltd.

Moreover, despite being a high advertisement spender over the years, the intense competition forced the company to make large changes in its brand promotion strategies at frequent intervals, leading to further marketing expenses.

FY2020 annual report, page

To curb with the competition and challenges in the market, Vadilal reinvented its strategy…with aggressive marketing approach and the menu to give the brand the lift it required to combat its international counterparts. In a bold step, the company revamped the entire brand identity

Therefore, investors should know that in a fragmented industry where consumers have numerous choices, companies may need high advertising expenses just to keep their business at current levels, because if you stop advertising, then competitors will take away consumers’ mindspace and wallet share. In such industries, high advertisement spending might be like running on a treadmill where, despite spending a lot of effort, effectively, the person is effectively stationary.

Also read: How to study Annual Report of a Company

3.3) Entry into parlors/branded outlets as well as related product categories:

Over the years, Vadilal Industries Ltd entered into physical outlets/parlors as well as related product categories to extend its business presence.

In FY2013, the company entered into dairy and milk products and launched its flarvored milk “Power Sip”.

FY2013 annual report, page 22:

Vadilal already has strong backward linkages with the farmer community for milk procurement…So, Vadilal recently forayed in the flavored milk segment under the brand name “Power Sip”.

The company owned a chain of ice-cream stores, “Happinezz”, and also started smaller shop-in-shop parlors in tier 2 & 3 cities.

FY2013 annual report, page 22:

Apart from the retail chain of ice-cream under the Happinezz brand name, Vadilal also started Shop in Shop Parlours. The Shop in Shop Parlour is a low investment formats that caters to the tier II & III essentially.

By FY2015, the company started premiumization of its ice-cream offerings and also started two more formats of parlors under the “Scoop Scoop” and “Hangout” brands.

FY2015 annual report, page 27:

Vadilal has started exclusive parlors in two formats: Scoop Shop and Hangout. … It is in line with our efforts towards shifting the brands focus from mass to mass premium.

In its quest to continuously update its offerings for changing consumer tastes, in FY2022, Vadilal Industries Ltd started “Now Forever” cafes where, apart from ice-cream, it offered other food items as well.

FY2022 annual report, page 19:

Vadilal’s latest launch is the “NOW FOREVER” café…The café also offers delectable, mouthwatering and interesting food prepared from the best ingredients

As a part of its premiumization initiatives, it launched “Melt In” parlors focused on high-end Gelato ice-creams.

FY2023 annual report, page 30:

Vadilal’s MELT IN parlor offers a range of high-end Artisanal Gelato ice cream that has gained a lot of popularity in the past few years

The company offered its “Happinezz” and “Hangout” parlors to franchisees to expand its brand presence at lower costs.

Credit rating report by CARE, October 2023, page 2:

There are 65 ‘happinezz’ and ‘Hangout’ parlours which are given by the Vadilal group on franchisee basis to third parties.

Vadilal Industries Ltd also entered the ice-cream parlor business in Illinois, USA, by acquiring an existing parlor from Krishna Krupa Corporation USA. (Vadilal Industries subsidiary buys 100% stake in US-based Krishna Krupa Corp: Business Standard, June 20, 2022)

It operates an ice creams parlour in the state of Illinois, USA…The acquisition of KKC will provide Vadilal USA with ready platform to understand the parlour business operations in USA. Key learnings from KKC operations will help in preparation of a successful business plan for a nationwide parlour business.

Efforts of the company at such business extensions, premiumization etc. indicate attempts to diversify its revenue streams and protect its profit margins.

However, at times, its initiatives did not progress as planned, for example, it could not expand the ice-cream parlor business in the USA.

3.4) Focusing on export to improve profit margins:

In recent years, Vadilal Industries Ltd has benefited from better product prices in export markets than in India, which has contributed to an improvement in profit margins.

Credit rating report by India Ratings, April 2025:

The average realisations in the export markets tend to be relatively higher than that in the domestic markets, thus improving the overall margins for the company.

The ice-cream business is highly seasonal, where a significant part of annual sales happens in the summer season and lower sales in the non-peak season, which impacts return on investment as the manufacturing plant is not fully utilized during the off-season.

Credit rating report by India Ratings, January 5, 2024:

The ice cream business is highly seasonal in nature, with maximum consumption taking place during the summer season…seasonality of business restricts the group’s return on capital employed, due to poor sales during the non-peak season.

A focus on the export of ice-creams also helps the company in reducing the impact of very high seasonality in the ice-cream business. This is because in India, the peak season for ice-cream sales is Q1 (April-June), whereas in the USA, the peak season is Q2 (July-September). As a result, the company can have two good quarters in different geographies and can reduce fluctuations in its performance.

Credit rating report by India Ratings, April 2025:

the peak consumption season in the US markets tend to be the second quarter of fiscal year (quarter ending September); thus, the peak sales of the company would be spread across first and second quarters of a fiscal year, thereby offsetting the seasonality

However, at the same time, an investor needs to keep in mind that the export of products has not always worked in favour of the company, as in its frozen food division, despite exporting a significant part of its production, Vadilal Industries Ltd made losses, e.g. during FY2016, FY2017 etc.

This was despite a strong focus on increasing exports of frozen food to the USA from FY2011 onwards by increasing investments in distribution infrastructure like warehouses.

FY2011 annual report, page 17:

Last year, Vadilal set up a subsidiary company in USA. Its warehouse in New Jersey is fully operations now and to further increase the reach, a plan of opening few more warehouses in other parts of USA is under process. Another focus area in USA would be to enter supermarket chains.

Therefore, an investor should be cautious before projecting the current profitability performance of exports into the future.

Also read: Can we Predict Future Performance of a Company?

4) Capital-intensive business model of Vadilal Industries Ltd:

The ice-cream as well as frozen foods business of the company is very capital-intensive, which regularly requires large investments.

One of the reasons for a large funds requirement is a continuous need for investment in the production assets (plant & machinery) as well as marketing & distribution assets (packaging, cold chain logistics etc.).

Credit rating report by CARE, January 2024, page 3:

Ice-cream manufacturing and distribution industry is capital intensive in nature requiring regular investment in production facilities, innovative products in terms of flavours and packaging, as well as marketing assets like cold storage chain, deep freezers, refrigeration equipped delivery vehicles, push card, etc

As consumers’ preference for flavours continues to change; therefore, Vadilal Industries Ltd has to continuously invest money to bring new innovative products to the market, making its business capital intensive.

Credit rating report by CARE, January 2024, page 3:

The business is also susceptible to changing tastes of consumers requiring investment in fixed assets leading to highly capital-intensive operations.

Another factor leading to large investments in production and distribution facilities is the high seasonality of the ice-cream business, where the company needs to install production capacity, keeping in mind the peak demand during the summer season. During the non-peak season, the production capacities are sub-optimally used, leading to lower returns on investment.

Credit rating report by CARE, August 2017, page 2:

Capacity utilization remained at 39% for ice-cream at pundra plant and 42% for Bareilly plant during FY17 while during peak season (April to June 2016) it remained high at nearly 85%.

As a result of large capital requirements both in fixed assets as well as working capital, Vadilal Industries Ltd has to rely significantly on debt.

Credit rating report by India Ratings, April 2019:

VIL incurs an average regular capex of INR300.0 million each year, which is primarily funded by term loans

Going ahead, an investor should keep a close watch on the debt levels of the company as in the past, there have been multiple instances where the company could not repay its debt on time and lenders had to restructure its debt and accept a loss on the money loaned by them to the company.

Also read: Asset Turnover Ratio: A Complete Guide for Investors

5) Default to lenders by Vadilal Industries Ltd in the past:

Vadilal group has been in the ice-cream business for more than a hundred years, i.e. since 1907. Over time, it has become a household name for ice-creams. However, despite being in business for multiple decades and having a well-established brand name, the company has faced tough times with very weak financial performance, leading to default on its loans.

As recent as FY2011 to FY2014, the company defaulted in making timely payments to its lenders and as a result, reported interest accrued and due in its balance sheet.

FY2014 annual report, page 89:

The company faced one of the worst periods of financial performance during FY2001 to FY2006 when it was continuously in default to its lenders and had to seek rescheduling of its loans. This was despite being in business for about a hundred years at that time.

FY2001 annual report, page 9:

In view of the liquidity problem faced by the Company, various financial institutions, namely, Sicom Ltd., IDBI, ICICI, IIBI and Exim Bank have re-scheduled their outstanding loans payable by the Company to them together with reduction in the rate of interest

One time rescheduling of loans did not prove sufficient for the company, and it had to seek repeated rescheduling of its loans.

FY2003 annual report, page 12:

in view of the liquidity problem, being faced by your Company, IDBI and IIBI have granted some reliefs and concessions to your Company by further rescheduling its outstanding loan, funding the outstanding interest and waiving the penal interest

In the end, lenders had to take a loss and agree to a one-time settlement for their loans.

FY2004 annual report, page 2:

full and final payment of outstanding loan amount of Rs. 100 lacs to National Horticulture Board (NHB) under One Time Settlement (OTS) Scheme. The Company has also fully re-paid Rupee Term Loan of Rs. 400 lacs to ICICI Bank Ltd. by re-payment of outstanding loan amount of Rs. 82.50 lacs under OTS Scheme. During the year under review, SIDBI has agreed to settle the outstanding Term Loan under OTS Scheme.

Vadilal Industries Ltd had to go for corporate debt restructuring (CDR), indicating that the company had effectively faced bankruptcy.

FY2004 annual report, page 2:

under the proposed CDR Scheme, your Company has also requested all Financial Institutions to reduce the present rate of interest, to allow more repayment period and…to sanction/tie-up additional working capital facilities.

During this period, FY2001-FY2006, the company faced a hard time getting loans from banks as it was defaulting on existing debt. As a result, the company had to raise money through fixed deposits.

FY2001 annual report, page 9:

Company has mobilised Fixed Deposit of Rs. 1178.81 lacs during the period of 15 months ended on 31 st March, 2001

However, due to poor financial position and liquidity problems, Vadilal Industries Ltd was not able to maintain the legally required liquid assets against these fixed deposit liabilities.

FY2003 annual report, page 29:

has complied with the provisions…with regard to the deposits accepted from the public, except that the company has not maintained adequate Liquid Assets

While reading the annual reports of Vadilal Industries Ltd during this period, an investor is surprised to see that during this period of such a tight liquidity situation where it was defaulting to its lender, the company was still making investments in stock markets in shares of companies like Jay Prakash Industries, Great Eastern Shipping, TISCO/Tata Steel, Essar etc.

FY2003 annual report, page 38:

Also read: How to Identify if Management is Misallocating Capital

Subsequently, the company defaulted on IDBI in repayment of its loans and restructured it in FY2009.

FY2009 annual report, page 15:

During the year under review, the Company has restructured the Term Loan of Rs. 6.00 crores availed from IDBI Bank Ltd., for one year.

Once again, an investor is surprised to note that during the same year, FY2009, the company invested in listed equity shares of Sanara Media Ltd.

FY2009 annual report, page 44:

Even in FY2010, the company had defaulted to lenders as it had interest accrued & due of about ₹20 lac (FY2010 annual report, pages 40 & 42). However, the company declared a dividend of ₹1.50 per share during the year (FY2010 annual report, page 14).

Investing money in equity shares of others and declaring dividends when the company is facing liquidity stress and is defaulting to lenders in repayment does not seem a good use/allocation of the scarce capital available with the company.

In the recent period, in 2020, the company had to avail a moratorium on its debt due to the financial stress during the Covid pandemic.

FY2020 annual report, page 22:

Company has also availed moratorium from all member banks for payment of Principal & Interest thereon till August 2020.

While analysing the history of Vadilal Industries Ltd, an investor comes across a company that faced serious financial difficulties despite being a well-known brand and in business for multiple decades. The company has seen periods of good performance that are followed by liquidity strain.

An investor should keep these historical fluctuations in the company’s performance in mind while projecting financial performance into the future.

Over the last 10 years (FY2015-FY2025), the tax payout ratio of Vadilal Industries Ltd has largely been in line with the standard corporate tax rate in India, except for the two years FY2020 and FY2024.

During FY2020, the tax payout ratio was lower at 14% because of the impact of deferred tax resulting from a shift to the new corporate tax regime.

FY2020 annual report, page 175:

Company elected to exercise the option permitted under section 115BAA of the Income-tax Act…resulted in reversal of Deferred tax expense of ₹ 639.19 lacs

During FY2024, the tax payout ratio was lower at 19% due to differences in tax rates in India and other foreign territories, as well as adjustments of FY2023.

FY2024 annual report, page 187 (₹ lakh):

Effect of different tax rate in India & foreign jurisdictions (3.68)

• Adjustments in respect of current income tax of previous year (8.46)

Also read: How to do Financial Analysis of a Company

Operating Efficiency Analysis of Vadilal Industries Ltd:

a) Net fixed asset turnover (NFAT) of Vadilal Industries Ltd:

Over the years, the NFAT of the company has stayed in the range of 2 to 3. The NFAT declined to 1.5 in FY2021, which was due to a decline in business during the Covid pandemic. Otherwise, the NFAT of the company has been within a stable range, indicating that Vadilal Industries Ltd has maintained its efficiency of utilization of fixed assets.

Going ahead, an investor should keep a close watch on the fixed asset turnover levels of the company to assess whether it is able to optimally utilize its manufacturing assets.

Further advised reading: Asset Turnover Ratio: A Complete Guide for Investors

b) Inventory turnover ratio (ITR) of Vadilal Industries Ltd:

Over the years, the inventory turnover ratio of the company has been in the range of 4.3 to 5.0. A nearly stable ITR over the decade indicates that the company has maintained its inventory utilization efficiency.

However, during any given year, Vadilal Industries Ltd faces challenges in managing its working capital position, including inventory, due to high seasonality in its core ice-cream business.

A significant part of sales in its ice-cream business takes place during the summer months. For example, during 2019, the company had more than 60% of its overall sales and 80% of its overall EBITDA during March & May.

Credit rating report by India Ratings, April 2019:

ice-cream business is highly seasonal in nature with more than 60% of the sales and 80% of EBITDA being generated between March and May.

To meet the peak demand of summer months, Vadilal Industries Ltd has to be ready with a lot of inventory at the end of March.

Credit rating report by CARE, January 2024, page 3:

working capital intensity is at its peak level in the last quarter of the financial year as it has to accumulate raw material inventory for meeting the demand for ice cream in the upcoming summer season.

Moreover, historically, prices of key raw materials of Vadilal Industries Ltd, i.e. skimmed milk powder, butter, cream etc. are lowest between November and January. Therefore, to benefit from lower costs, the company purchases the requirements of its entire upcoming peak season at this time, which further increases inventory levels during the March quarter.

Credit rating report by CARE, August 2017, page 2:

each year during November and January, the raw material prices are at their lowest due to dynamics of dairy industry. VIL focuses on procuring their entire requirement for the upcoming summer season during this period

The seasonality leading to the accumulation of high inventory at the end of the March quarter hurt the company significantly when, in 2020, the country went into lockdown and a subsequent decline in business during March-June 2020.

During this period, Vadilal Industries Ltd was prepared for peak demand expected in the upcoming summer months. However, due to lockdown and COVID, the demand did not come. The company had taken loans for purchasing raw material that it expected to repay after selling ice-creams in the summer months.

Credit rating report by India Ratings, July 2020:

The company has a high level of finished goods and raw material inventory that was built-up in anticipation of strong sales in 1QFY21, leading to its higher working capital requirements in 1QFY21. VIL has borrowed short-term demand loans/pledge loans aggregating INR750 million from various lenders to fund its raw material purchases

However, due to very low demand for ice-creams, the company could not sell its inventory of ice-creams, and as a result, it had to ask its lenders to give it more loans so that it could overcome the liquidity crunch.

Credit rating report by India Ratings, July 2020:

VIL has not been able to liquidate its finished goods inventory as anticipated and may require refinancing these loans for at least 12 months. VIL has approached all its bankers to provide INR800 million of incremental debt for six years to bridge the liquidity gap.

During this period, Vadilal Industries Ltd faced so much liquidity crunch that it started delaying payments to vendors so that it could repay its loans to avoid bankruptcy.

Credit rating report by India Ratings, August 2021:

However, during the year the payable days stretched to 93 days in FY21 (FY20: 59 days) as the group delayed payments to creditors of deep freezers and skimmed milk powder vendors, while ensuring the timely servicing of bank debts.

Thereafter, in FY2022, the company resumed timely payments to its vendors, which led to a large amount of money getting stuck in working capital, both to purchase new inventory as well as to repay old dues to vendors. It led to a sharp decline in cash flow from operating activities (CFO) in FY2022 compared to FY2021.

Credit rating report by India Ratings, October 2022:

cash flow from operations…declined sharply to INR342 million in FY22 (FY21: INR780 million…sharp increase in working capital requirement, led by higher inventory costs. There was also a decline in trade payables outstanding, as the group resumed the timely payments to creditors

Therefore, an investor would note that the very high working capital needs of Vadilal Industries Ltd concentrated in a short period expose it to risk in case, during any year, its sales during the peak season are disrupted. In such a case, the company needs to run from pillar to post to arrange for money to avoid defaulting to lenders.

Moreover, due to high inventory accumulation, which is perishable, every year, Vadilal Industries Ltd faces spoilage/damage to inventory, and it has to write it off.

For example, the company wrote off inventory worth ₹7.60 cr in FY2024 and ₹7.47 cr in FY2023.

FY2024 annual report, page 172:

Write-down of inventories amounted to ₹ 7.60 crore as at March 31, 2024 (as at March 31, 2023 ₹ 7.47 crore).

Going ahead, an investor should keep a close watch on the working capital position of the company, especially its inventory position, to understand whether it is able to keep its working capital situation under control or not.

Further advised reading: Inventory Turnover Ratio: A Complete Guide

c) Analysis of receivables days of Vadilal Industries Ltd:

Over the years, receivables days for the company have deteriorated from 15 days in FY2016 to 28 days in FY2024. The company saw its receivables days extend to 35 days in FY2021, which was due to stress in the entire supply chain due to the COVID-19 lockdown. Subsequently, receivables days have improved to 28 in FY2024.

Nevertheless, an increase in receivables days indicates that the company is not able to collect its money from its customers on time and, as a result, has to infuse additional money to run its business operations, leading to increasing working capital debt over the years.

Going ahead, an investor should watch the trend of receivables days of Vadilal Industries Ltd to assess whether it is able to collect its receivables on time and avoid a liquidity crunch.

Further recommended reading: Receivable Days: A Complete Guide

When an investor compares the cumulative net profit after tax (cPAT) and cumulative cash flow from operations (cCFO) of Vadilal Industries Ltd for FY2015-FY2024, then she notices that over the years (FY2015-FY2024), the company is able to convert its profit into cash flow from operations.

Over FY2015-24, Vadilal Industries Ltd reported a total cumulative profit after tax (cPAT) of ₹418 cr. During the same period, it reported a cumulative cash flow from operations (cCFO) of ₹632 cr.

It is advised that investors should read the article on CFO calculation, which would help them understand the situations in which companies tend to have the CFO lower than their PAT. In addition, the investors would also understand the situations when the companies would have their CFO higher than PAT.

Further recommended reading: Understanding Cash Flow from Operations (CFO)

Learning from the article on CFO will indicate to an investor that the cCFO of Minda Industries Ltd is higher than the cPAT due to the following factors:

1. Depreciation expense of ₹210 cr (a non-cash expense) over FY2015-FY2024, which is deducted while calculating PAT but is added back while calculating CFO.
2. Interest expense of ₹184 cr (a non-operating expense) over FY2015-FY2024, which is deducted while calculating PAT but is added back while calculating CFO.

The Margin of Safety in the Business of Vadilal Industries Ltd:

a) Self-Sustainable Growth Rate (SSGR):

Read: Self Sustainable Growth Rate: a measure of Inherent Growth Potential of a Company

Upon reading the SSGR article, an investor would appreciate that if a company is growing at a rate equal to or less than the SSGR and it can convert its profits into cash flow from operations, then it would be able to fund its growth from its internal resources without the need of external sources of funds.

Conversely, if any company attempts to grow its sales at a rate higher than its SSGR, then its internal resources would not be sufficient to fund its growth aspirations. As a result, the company would have to rely on additional sources of funds, like debt or equity dilution, to meet the cash requirements to generate its target growth.

An investor may calculate the SSGR using the following formula:

SSGR = NFAT * NPM * (1-DPR) – Dep

Where,

• SSGR = Self Sustainable Growth Rate in %
• Dep = Depreciation rate as a % of net fixed assets
• NFAT = Net fixed asset turnover (Sales/average net fixed assets over the year)
• NPM = Net profit margin as % of sales
• DPR = Dividend paid as % of net profit after tax

(For systematic algebraic calculation of SSGR formula: Click Here)

Over the years, SSGR of Vadilal Industries Ltd has averaged about 2%-4%, which is much lower than the sales growth of 12% year on year achieved by the company over FY2015-FY2024. As a result, the company had to rely on external funds to meet its requirements.

As discussed earlier, the business of the company is capital-intensive, and it requires a regular investment of a large amount of money in its manufacturing and distribution assets, including working capital. As a result, the total debt of the company has increased from ₹152 cr in FY2015 to ₹223 cr in FY2024.

Even now, the company has approved an expansion plan of its capacities of about ₹160 cr, for which it plans to raise a debt of about ₹150 cr.

Credit rating report by India Ratings, April 2025:

The planned expansion of the Pundhra (Gujarat) ice cream plant is likely to entail a capex of around INR1,600 million; as of March 2025, VIL had already been sanctioned term loan of INR1,200 million and working capital of INR300 million towards this capex

Going ahead, an investor needs to keep a close check on the debt level of Vadilal Industries Ltd to continuously monitor whether it again lands up in a situation of liquidity crunch and default to lenders.

b) Free Cash Flow (FCF) Analysis of Vadilal Industries Ltd:

While looking at the cash flow performance of Vadilal Industries Ltd, an investor notices that during FY2015-FY2024, it generated a cash flow from operations of ₹632 cr. During the same period, it did a capital expenditure of about ₹426 cr.

Therefore, during this period (FY2015-FY2024), Vadilal Industries Ltd had a free cash flow (FCF) of ₹206 cr (= 632 – 426).

In addition, during this period, the company had a non-operating income of ₹80 cr and an interest expense of ₹184 cr. As a result, the company had a total free cash flow of ₹102 cr (= 206 + 80 – 184). Please note that the capitalized interest is already factored in as part of the capex deducted earlier.

Vadilal Industries Ltd has used this cash to pay dividends to its shareholders and has kept ₹69 cr as cash & investment with itself on March 31, 2024.

The company would need this money and much more as it plans to shift its Bareilly plant to a new place at a cost of ₹385 cr.

Corporate announcement to BSE, May 25, 2024, page 1:

Board of Directors…approved the following…Approval to shift Bareilly Plant to a new place with larger capacity at an estimated cost of Rs.385 Crore

Going ahead, an investor should keep a close watch on the cash flow position of Vadilal Industries Ltd to understand whether the company is able to generate surplus cash from its business or it keeps on relying on outside funds for growth and running its day-to-day operations.

Further recommended reading: Free Cash Flow: A Complete Guide to Understanding FCF

Self-Sustainable Growth Rate (SSGR) and free cash flow (FCF) are the main pillars of assessing the margin of safety in the business model of any company.

Further advised reading: 3 Simple Ways to Assess “Margin of Safety”: The Cornerstone of Stock Investing

Additional aspects of Vadilal Industries Ltd:

On analysing Vadilal Industries Ltd and after reading annual reports, credit rating reports and other public documents, an investor comes across certain other aspects of the company, which are important for any investor to know while making an investment decision.

1) Management Succession of Vadilal Industries Ltd:

The company is a part of the Vadilal group, owned by the Gandhi family. The business was started by Mr Vadilal Gandhi in 1907. Currently, the fifth generation of promoters is actively involved in the company.

The following chart taken from the order of National Company Law Tribunal (NCLT), Ahmedabad dated July 10, 2024 in the company petition (CP) 41 of 2017, page 25, showing family tree of Gandhi family starting with the member of second generation, Mr Ranchodlal Vadilal Gandhi (son of Mr Vadilal Gandhi) is very illustrative.

The fourth generation had four sons: Mr Virendra Gandhi, Mr Shailesh Gandhi, Mr Rajesh Gandhi and Mr Devanshu Gandhi.

Out of these, Mr Shailesh R Gandhi (SRG) separated his business from the family in 1993 and focused on running the Vadilal business exclusively in southern states (Maharashtra, Karnataka, Andhra Pradesh, Kerala and Goa).

NCLT order in CP 41 of 2017 dated July 10, 2024, page 31:

Memorandum of Understanding dated 30.03.1993…In this agreement, SRG was allocated southern territories of the Vadilal business. Thus, SRG became separate from the business and is no way concerned with the Vadilal Group of Companies.

FY2015 annual report, page 66:

Company is having…sales its products in India except states of Maharashtra, Karnataka, Andhra Pradesh, Kerala and Goa.

Of the families of the rest of three sons, Virendra, Rajesh and Devanshu, currently, 6 people are working in the company (highlighted in red and blue circles in the above chart):

• From the fourth generation: Mr Rajesh Gandhi (age 66 years) and his wife, Ms Mamta Gandhi; Mr Devanshu Gandhi (age 57 years) and his wife, Ms Deval D Gandhi.
• From the fifth generation: Mr Kalpit Gandhi, son of Mr Rajesh Gandhi and Mr Janmajay Gandhi (age 47 years), son of Mr Virendra Gandhi. FY2015 annual report, page 48, mentions that Ms Astha Gandhi, daughter of Mr Rajesh Gandhi, was working as G.M. Melt-in (cafes). However, the latest annual reports do not contain her name. An investor may contact the company directly to check here current association with the company.

On one end, the presence of members of the fifth generation in an active role in the company when elders from the fourth generation are still playing an active role seems a good succession planning as the new members can learn the skills and gain experience before taking full control of the leadership.

However, as we discuss below, the Gandhi family of the Vadilal group has seen a lot of disputes and infighting before things have come to the current level where it seems to have achieved peace (Vadilal family settles dispute after lengthy legal battle: The Times of India, April 3, 2025).

Currently, as a part of the family settlement, the Gandhi family have thought of handing over management of the company to professionals. As a part of the management restructuring, on June 12, 2025, Vadilal Industries Ltd has appointed Mr Shivakumar Dega, an independent director, as the chairman of the company.

An investor should closely monitor whether the plans of the promoter family to separate ownership and management are sustained in the long term.

The presence of a well-thought-out management succession plan is essential in the case of promoter-run businesses as it provides for the smooth transition of leadership over the generations and provides continuity in the business operations of any company.

Further advised reading: How to do Management Analysis of Companies?

2) Infighting and disputes in the Gandhi family:

Out of the four sons in the fourth generation, first, Mr Shailesh Gandhi separated his business interests in 1993 by segregating his business operations exclusively in the southern states.

However, the remaining three brothers: Virendra, Rajesh and Devanshu have witnessed a lot of prolonged disputes, which started after Mr Ramchandra R Gandhi of the third generation became old and stopped active involvement in the company.

The order of NCLT, Ahmedabad, in CP 41 of 2017, dated July 10, 2024, makes for an insightful reading to understand the family dynamics of the Gandhi family.

One of the rest of the three sons of the fourth generation, Mr Virendra R Gandhi (VRG, the petitioner) alleged that as Mr Ramchandra R Gandhi became old and withdrew from active management in FY2013, the other two sons: Mr Rajesh R Gandhi (respondent no. 2) and Mr Devanshu L Gandhi (respondent no. 3) expelled his (Mr Virendra’s) family from the business and took full control of the Vadilal group for themselves.

NCLT order in CP 41 of 2017 dated July 10, 2024, page 9:

The petitioners further stated that due to old age of Mr. Ramchandara Ranchodlal Gandhi, his participation in the affairs of the company decreased from 2012-2013…Respondent Nos. 2 and 3 and their families gradually started ousting VRG family from the operation and management and benefits from family businesses.

To regain his share of the business, Mr Virendra Gandhi filed cases against Mr Rajesh R Gandhi, Mr Devanshu L Gandhi, as well as the company, Vadilal Industries Ltd and others.

While the dispute between Rajesh and Devanshu with Virendra was going on, it was not that the relationship of Rajesh and Devanshu was cordial.

In FY2019, infighting broke out between Rajesh Gandhi and Devanshu Gandhi, and they levelled various allegations of improper conduct and claimed personal expenses as official.

FY2019 annual report, page 162:

two Promoter Directors of the Company have sent out numerous communications to the Board…making various allegations and counter-allegations on each other…potential personal expenses claimed as official expenses, funds management, dissemination of price sensitive information

Their dispute continued in FY2021 when in the group company, Vadilal Enterprises Ltd, one of the promoter directors, alleged impropriety in advertisement expenses of ₹38 cr.

Credit rating report by CARE, October 2021, page 3:

new allegation by a promoter director arise in FY21 in Vadilal Enterprises Limited relating to…marketing expenses of advertisement amounting to Rs.38 crore paid by the company…without following the due process

In July 2024, in the petition by Virendra Gandhi, NCLT ordered that the business of the Vadilal group be divided equally between the families of three sons: Virender Gandhi, Rajesh Gandhi and Devanshu Gandhi.

NCLT order in CP 41 of 2017 dated July 10, 2024, page 84:

All the Vadilal Gandhi family businesses be divided amongst 3 families i.e. VRG family, RRG family and DLG family, by appointing Court Commissioner.

After this order of division of business by the NCLT, the promoters seem to have sat together to resolve their differences. In March 2025, they decided to withdraw all complaints against each other, maintain equal interest of each of the three families and agreed to accept Mr Janmajay Gandhi, son of Mr Virendra Gandhi, as an executive director in the company.

Corporate announcement to BSE, March 29, 2025, pages 1 and 3:

Gandhi Family has agreed to settle their inter-se disputes…maintain equality of interests and participation of all the promoters.

Approval for appointment of Mr. Janmajay V. Gandhi as an executive director of the Company

So, as things stand now, all three families of Virender Gandhi, Rajesh Gandhi and Devanshu Gandhi have equal participation in the affairs of the company. However, looking at the history of continuous, prolonged in-fighting among them, an investor should monitor developments related to promoters’ families carefully. This is because any uncertainty in the continuity of promoters’ leadership or the division of business will have a significant impact on the future of the company.

In the past, on multiple occasions, Vadilal Industries Ltd had to forego a large investment proposal because of in-fighting among promoters. For example, in the past, an investment by Arpwood did not go through due to promoters’ dispute (Source)

Arpwood had earlier offered to buy stake in Vadilal but the promoter dispute delayed the stake sale in the past, a CNBC report said.

Also read: Why Management Assessment is the Most Critical Factor in Stock Investing?

3) Curious case of delays in investigation into allegations of promoters passing personal expenses as official:

When, in FY2019, Rajesh Gandhi and Devanshu Gandhi levelled allegations against each other of financial improprieties, the board of the company appointed an external consultant to investigate the allegations of claiming personal expenses as official during FY2018 and FY2019.

FY2019 annual report, pages 165-166:

The Board…in their meeting dated March 30, 2019, have appointed an independent external consultant to perform procedures to ascertain whether potential personal expenses have been claimed as business expenses

I am not sure how much time it might take for an agency to ascertain whether personal expenses are claimed as business expenses. However, in this case, Vadilal Industries Ltd could not get this report for almost 6 years until May 2025.

First, in FY2020, the company terminated the external consultant and appointed a law firm and a chartered accountant (CA) firm to investigate these claims. In FY2020, the board stated that the report is delayed due to the Covid pandemic.

FY2020 annual report, page 188:

On termination by the Board of the earlier appointment of external consultant dated March 30, 2019, the committee of independent directors thereafter, has appointed an independent law firm and chartered accountant firm to inquire/examine in all the matters …Due to the outbreak of COVID-19, the inquiry/reports are delayed.

In FY2020, the statutory auditor of the company, M/s Deloitte, resigned from the company as the company did not provide it sufficient audit evidence and therefore, it could not form a definitive opinion about the financial results. Deloitte highlighted that pending inquiries and investigations might have a significant impact on the company’s results.

Credit rating report by India Ratings, November 2019:

statutory auditor…M/s. Deloitte Haskins & Sells LLP, has resigned on 15 November 2019…they were unable to obtain sufficient, appropriate audit evidence, as VIL’s management is not completing/initiating inquiries/investigations into various matters. Furthermore, as per the auditor, the outcome of pending inquiries/investigations may have a significant impact on the operations of the company and on its financial results.

The findings of the investigation were still pending even after 5 years in FY2024.

FY2024 annual report, page 146:

allegations relating to potential personal expenses claimed as official business expenditure…by two Promoter Directors respectively for which report/findings are yet to be received.

Ultimately, in May 2025, when the promoters have already settled their disputes in March 2025, the board stated that, now, it has received the investigation/findings report and there is nothing significant in it.

Q4 results, May 2025, page 6:

Based on the reports received from the Independent Law Firm and the Chartered Accountant Firm, the Board…has resolved to conclude and close the matters relating to allegations concerning potential personal expenses claimed as official…confirms that there is no financial impact on the financial results of the Company

It might be a case where the board, the law firm and the CA firm waited for six long years for the promoters’ dispute to get resolved before submitting the report to effectively dismiss the allegations.

An investor may take her independent assessment regarding the time that any law firm or CA firm may take to investigate such claims, and she may contact the company directly to understand the reasons why it took six years for these firms to give the report and that too with a perfect timing of settlement among promoter families.

Also read: Why We cannot always Trust What Management Claims

4) Related party transactions of Vadilal Industries Ltd with promoter group companies:

Over the years, Vadilal Industries Ltd has entered into numerous transactions with other Vadilal group companies.

4.1) Transactions with Vadilal Enterprises Ltd:

The business of Vadilal Industries Ltd and another company of the Vadilal group, Vadilal Enterprises Ltd (VEL), is deeply integrated. It is integrated to such an extent that until recently, all credit rating agencies used to assess these two companies as one combined entity while assigning a credit rating.

Credit rating report by CARE, September 2018:

CARE has taken a combined view of consolidated financial of VIL and financial of Vadilal Enterprises Ltd…due to their managerial and operational linkages apart from VIL’s propensity to support VEL’s operation under the corporate guarantee obligation

Vadilal Industries Ltd had given almost complete selling rights of its products in India to VEL. The decisions about where to sell and at what price are taken by VEL.

Credit rating report by India Ratings, April 2025:

VEL is the domestic selling arm for VIL. VEL procures its entire ice cream requirements from VIL and then sells it across India…All marketing decisions, such as those related to geographical presence and pricing of stock keeping units are taken at VEL.

An investor would appreciate that when the company offloads its distribution and retail pricing decisions to VEL, it lets go of a significant portion of value addition in the overall supply chain from the manufacturer to the final consumer.

From the point of view of the promoters, the entire value stays within their group as part of the value in manufacturing is captured by Vadilal Industries Ltd and the other part in distribution/selling is captured by VEL. However, from the point of view of the non-promoter/minority/retail shareholders of Vadilal Industries Ltd, the company may have given up a substantial portion of the value addition/profit component by giving up the distribution and selling of its products.

Moreover, due to this deep integration of Vadilal Industries Ltd with the promoter group entity, VEL, the company ends up giving many other favours to VEL. For example, it gives guarantees to banks for loans taken by VEL.

Last year, Vadilal Industries Ltd gave guarantees to banks for loans of about ₹62 cr taken by VEL (₹30 cr from CSB Bank and ₹32 cr from IndusInd Bank).

Corporate announcement to BSE, May 25, 2024, page 1:

The corporate guarantee of Rs. 30 Cr will be issued in favor of CSB bank (lender) for an extending credit facility to VEL

Q1-FY2025 results, August 2024, page 1:

Grant of Corporate Guarantee to M/s. Vadilal Enterprises Limited against term loan of Rs. 32 Crore of M/s. IndusInd Bank Limited.

An investor may note that when Vadilal Industries Ltd gives a corporate guarantee to any lender for loans taken by promoter group entities, then if the said entity is not able to repay the loan, then Vadilal Industries Ltd will have to pay it to the lender otherwise lender will legally recover it from Vadilal Industries Ltd.

Additionally, probably due to common promoters, Vadilal Industries Ltd gives very generous credit terms to VEL for products sold by it. As per the terms, VEL needs to pay Vadilal Industries Ltd in 180 days from the last day of the month of supply of products, i.e. up to 210 days from the supply.

FY2015 annual report, page 9:

Payment shall be made by VEL within 180 days from the last date of month in which the Company has supplied the products to VEL.

Moreover, in FY2020, the company reduced ₹3.25 cr from the payments due from VEL.

FY2020 annual report, page 184:

To temporarily tide over the business loss suffered by its primary customer…Holding Company has given a special credit note to Vadilal Enterprises Limited for ₹ 325 lacs.

In 2021, Vadilal Industries Ltd gave special discounted price to VEL; however, later on it realized that the price was excessively discounted, so, to correct it, later on, Vadilal Industries Ltd issued a debit note to VEL.

FY2021 annual report, pages 167-168:

Holding Company has issued a special debit note to Vadilal Enterprises Limited, on June 28, 2021 owing to the additional discounted prices at which the original transactions took place

Also read: How Promoters benefit from Related Party Transactions

4.2) Sale and purchase of assets from promoter entities by Vadilal Industries Ltd:

Over the years, the company has entered into multiple sales and purchase transactions with its promoters.

For example, one of the biggest transactions between Vadilal Industries Ltd and promoters took place when, in FY1998, promoters sold the Bareilly ice-cream plant held in their entity, Majestic Farm House Limited, to the company, and it became a subsidiary of Vadilal Industries Ltd.

FY1998 annual report, page 12:

During the period under review, Majestic Farm House Limited (Majestic) became a Subsidiary of the Company

FY2002 annual report, page 53, containing the annual report of Majestic Farm House Limited:

Members are also aware that the Company had already transferred its entire ice-cream business of Bareilly operations on going concern basis to Vadilal Industries Limited, a Holding Company, on 20th September, 1997

Recently, in FY2023, Vadilal Industries Ltd planned to sell some properties of about ₹57 cr. to promoters and had taken approvals for the same. However, subsequently, the deal did not go through.

FY2023 annual report, page 153:

approved resolution for sale of certain non-core assets of the Company to entities of the members of Promoter and Promoter group of the Company…the sell is considered not to be highly probable…these Property…having written down value of ₹ 5,709.17 lacs

In the past, it seems that Vadilal Industries Ltd purchased some flats for which it made the payments; however, the flats were purchased in the name of the promoters.

FY1997 annual report, page 18:

title deeds in respect of Residential Flats of Rs. 272,872/- are in the name of Managing Director who holds the same on behalf of the Company.

An investor would note that whenever any publicly-listed company buys or sells any product or service from its promoters/entities, then each of such transactions provides an opportunity to shift economic benefits from minority shareholders to promoters. This is true in cases where the company buys goods/services from promoter entities at a price higher than the fair market price or sells goods/services to promoter entities at a price lower than the fair market price.

Also read: How to know if Promoters are Losing Commitment to the Company

4.3) Financial investments and loans & advances given by Vadilal Industries Ltd to promoter group entities:

Over the years, the company has been providing money/value to promoters by investing money in equity shares or giving loans & advances to promoter group entities.

For example, the company purchased about 30.22% stake in one of the promoter group companies, Vadilal Chemicals Ltd and then subsequently sold it off.

FY2009 annual report, page 71:

The associate considered in the consolidated financial statement is: Vadilal Chemicals Ltd…Proportion of ownership interest 30.22%

In FY2010, it sold off the entire stake in Vadilal Chemicals Ltd.

FY2010 annual report, page 15:

During the year under review, Vadilal Chemicals Ltd. ceased to be an Associate of the Company due to disinvestment of entire holding by the Company.

In FY2013, it purchased a stake in Vadilal Forex and Consultancy Services Ltd (FY2013 annual report, page 18), and in FY2017, it sold it off (FY2017 annual report, page 70).

In FY1998, it merged/amalgamated another financial services company of the promoter group, Vadilal Financial Services Ltd, with itself.

FY1998 annual report, page 11:

Due to amalgamation of Vadilal Financial Services Limited (VFSL) with the Company, the Forex Division of VFSL has been transferred to the Company among other business of VFSL

The businesses of financial services or foreign exchange are very different from the business of ice-creams and frozen foods. An investor may contact the company directly for clarification about what value for shareholders it found in merging these financial companies with itself.

In FY2003, Vadilal Industries Ltd wrote off loans for about ₹7.2 cr that it had provided to employees. (FY2003 annual report, page 29). An investor may contact the company directly to understand whether any of these employees were related to promoters or friends, or family.

In respect of loans given by the company to its employees…Loans including interest thereon aggregating to Rs 720.88 lakhs recovery of which has not come is adjusted / written off against securities premium account.

In addition to such deals in equities, Vadilal Industries Ltd has been providing loans & advances to promoter group entities.

For example, the company has been regularly giving loans & advances to the promoter entity Vadilal International Pvt. Ltd. (VIPL) in FY2014 and FY2015; it had loans outstanding for ₹6 cr to VIPL (FY2015 annual report, page 116).

During the disputes among promoters’ families, Mr Virendra Gandhi made allegations against Mr Rajesh Gandhi and Mr Devanshu Gandhi of syphoning of large amount of money from Vadilal group companies.

NCLT order in CP 41 of 2017 dated July 10, 2024, page 44:

monies from the Vadilal group companies are used for purchasing properties in the name of RRG and DLG family.

RRG and DLG families siphoned funds of Vadilal group companies in the year 2013 by wrongly sanctioned loan of Rs.25 crores to father- in-law… of Respondent No.2 (Mr Rajesh Gandhi) without any reason. Respondent No.2 was Chairman at that time…respondent submitted that no such loan was disbursed.

In its order, NCLT directed M/s Delloite to investigate these claims by auditing related party transactions of all Vadilal group companies.

NCLT order in CP 41 of 2017 dated July 10, 2024, page 86:

M/s Delloite is appointed to do a special and secretarial audit to verify books of accounts of all related party transactions of the family members of VRG, RRG and DLG in all the companies…and report any irregularities to the Board with copy to the RoC and MCA. The report to be placed before the AGM of the respective companies after submission and approval by the board.

However, now that the promoter family has settled their disputes and all the complaints have been withdrawn; therefore, investors may never know the truth behind these allegations of syphoning of funds.

It is advised that investors should keep a close watch on the related party transactions of Vadilal Industries Ltd with its promoters and group entities, as such transactions provide avenues for shifting of economic benefits from minority/public shareholders to promoters.

4.4) Royalty demanded by promoters from Vadilal Industries Ltd:

The company has been continuously paying royalties to the promoters of the Vadilal group for using the brand “Vadilal”.

Please note that in such transactions where a publicly-listed company pays royalty to promoters/entities, effectively, it is the minority shareholders paying royalty to promoters. This is because from the entire royalty payment by the listed company, the proportionate share of promoters is going back to the promoters’ pocket only. The net money transfer is the proportionate share of public shareholders, which is now shifted to promoters via the entity owning the brand.

Over the years, there have been disputes between Vadilal Industries Ltd and its promoters over the royalty charges. For example, in FY2024, when the export of ice-creams by Vadilal Industries Ltd was increasing, promoters wanted the overseas subsidiary of the company, Vadilal Industries (USA) Inc (VIU), to separately pay 3% of its sales revenue. However, their demand did not go through.

FY2024 annual report, page 187:

Vadilal Industries (USA) Inc (VIU)…has received…from Vadilal international Private Limited (VIPL) informing that VIU is using Vadilal brand owned by VIPL and hence VIPL will charge royalty @3% per year on sales value of VIU

VIU is of the view that royalty is not applicable on its sales since there is already existing royalty agreement between VIL and VIPL for sales made by VIL. According to this agreement, VIL is paying royalties based on FOB value of export sales to VIU.

Thereafter, the promoters tried to sell the Vadilal brand to Vadilal Industries Ltd for up to ₹676 cr + taxes. However, the deal did not go through.

FY2024 annual report, page 187:

approved resolution for purchase of “VADILAL” brand for consideration not exceeding ₹ 676 crore plus taxes from Vadilal International Private Ltd., a promoter of the Holding Company.

Now, in May 2025, as a part of the family settlement of the Gandhi family, the promoters have again decided to sell the Vadilal brand to Vadilal Industries Ltd by way of merging the promoter company, VIPL, that owns the Vadilal brand, into Vadilal Industries Ltd.

Q4-FY2025 results, May 2025, page 6:

approved the proposed scheme of amalgamation of the following promoter group companies with the Company: Vadilal International Private Limited (“VIPL”).”

An investor should keep a close watch on the value that Vadilal Industries Ltd transfers to the shareholders of VIPL as a consideration of this amalgamation, which would effectively be the price paid by Vadilal Industries Ltd for the brand Vadilal.

Also read: Why We cannot always Trust What Management Claims

4.5) Promoter families taking the same salary from Vadilal Industries Ltd:

Over the years, the promoters of Vadilal Industries Ltd have been taking exactly equal salaries from the company.

For example, both Mr Rajesh Gandhi and Mr Devanshu Gandhi received remunerations of ₹7.07 cr in FY2024 and ₹5.33 cr in FY2023.

FY2024 annual report, page 193:

Ideally, an investor would expect that any company would pay its employees, including promoters or directors, as per the value added by them to the company.

However, in the case of Vadilal Industries Ltd, it seems that the promoters are taking equal remuneration as per the agreement entered into by them with each other that they will take out equal profits and remunerations from the companies.

NCLT order in CP 41 of 2017 dated July 10, 2024, page 59:

as per MoUs entered into between 3 families, they have to equally share profit and remuneration

An investor may note that the fact that all the promoter families draw equal remuneration from Vadilal companies may be fair to the promoters. However, we are not sure whether it is fair to the minority shareholders of Vadilal Industries Ltd, when the employees, including promoters, are not paid as per the work/value they produce and instead are paid as per the agreement entered by promoters among themselves.

Also read: How to identify Promoters extracting Money via High Salaries

5) Aggressive accounting assumptions by Vadilal Industries Ltd:

In the past, there have been occasions when the company used aggressive accounting to show an improved financial position, which was then pointed out by the auditors to shareholders.

For example, in FY2014, Vadilal Industries Ltd had accounted for transport subsidy when the govt. had not yet announced the subsidy policy.

FY2014 annual report, page 101:

Emphasis of Matter a. Attention is invited to…company has for the year accounted transport subsidy of Rs. 80 Lacs awaiting announcement of such policy from government.

In FY2013 as well, the company had recognised similar subsidies which were not yet announced by the government, which were highlighted by the auditor (FY2013 annual report, page 89).

Vadilal Industries Ltd has been using aggressive accounting practices for a long time. For example, in FY1997, the auditor highlighted that the company did not reduce the value of its long-term investments that were listed on stock exchanges even when their prices had declined.

FY1997 annual report, page 27:

No provision for diminution of Rs. 2,71.86.652/- in value of long term quoted investments has been made

Such aggressive accounting practices show the profit of the company to be higher than what it would have been otherwise if it had recognised the value of investments at their stock market value or had waited for the government to announce the transport subsidy before recognising it in its financials.

Also read: How Companies Inflate their Profits

6) Penalties by BSE and NSE on Vadilal Industries Ltd for not meeting statutory norms:

Over the years, on numerous occasions, BSE and NSE have imposed penalties on Vadilal Industries Ltd for flouting regulatory norms.

For example, in FY2019, the company delayed the declaration of results for the September 2018 quarter and as a result, both BSE and NSE imposed penalties of ₹76,700/- each on the company.

FY2019 annual report, page 45:

Penalty paid to Bombay stock Exchange and National Stock Exchange for late declaration of Unaudited financial results for the quarter and half year ended on 30th September, 2018 of Rs. 76700 to BSE and NSE each.

Thereafter, Vadilal Industries Ltd again delayed results for the March 2019 and June 2019 quarters and paid penalties of ₹560,500/- each to BSE and NSE.

FY2021 annual report, page 42:

Penalty paid to BSE limited and National Stock Exchange of India Ltd. for delay in declaration of audited fnancial results for quarter ended 31st March, 2019 and…for quarter ended 30th June, 2019 of ₹5,60,500/- to each stock exchange.

Moreover, in FY2021, BSE and NSE put a penalty of ₹885,000/- each on the company for not appointing an independent woman director on the board.

FY2021 annual report, page 42:

Penalty paid to BSE limited and National Stock Exchange of India Ltd. for delay in appointment of independent woman director in the company of ₹ 8,85,000/- to each stock exchange.

Also read: Varanium Cloud Ltd: How Retail Investors Can Avoid Such Traps

7) Weakness in internal controls & processes at Vadilal Industries Ltd:

Over the years, an investor comes across numerous instances that showcase that internal controls and processes at Vadilal Industries Ltd need strengthening.

For example, almost every year from 1997 to 2015, the auditor highlighted that the company did not conduct a physical verification of its assets.

FY2015 annual report, page 95:

company has not conducted physical verification of fixed assets during the year.

FY1997 annual report, page 10:

Company has not carried out physical verification of the assets except vehicles and computers.

Similarly, over the same period, FY1997 to FY2015, almost every year, the auditor pointed out that the company has not paid undisputed statutory dues like provident fund, employees’ state insurance dues, sales tax, advance tax etc., on time, and there were significant delays in the same.

FY1997 annual report, page 11:

delays in depositing Provident Fund and Employees State Insurance dues…except Sales Tax of Rs. 14.37.754/- which remains outstanding for a period of more than six months from the date they become payable

FY2015 annual report, page 95:

except sales tax of 17.00 Lakhs which remains outstanding for a period of more than six months

Since FY2016, the auditor of the company has started highlighting that Vadilal Industries Ltd is not making the legally required spending on corporate social responsibility (CSR) on time.

FY2016 annual report, page 47:

company is required to spend 2% of average net profit…However it has been noted that the company has not spent any amount on CSR activities

Until FY2020, every year, the auditor of Vadilal Industries Ltd continuously highlighted that the company is not spending the required money on CSR.

FY2020 annual report, page 80:

Company was required to spend…Rs. 68.43 Lakhs towards Corporate Social Responsibility…However…Rs. 20.36 Lakhs was spent…and the remaining amount was unspent.

Thereafter, since FY2019, every year, the statutory auditor highlighted that the promoters of Vadilal Industries Ltd have not maintained their shareholding in a 100% dematerialised format. Every year, the company replied that the promoters are in the process of converting their physical shares into demat.

FY2019 annual report, page 80:

As required under Reg. 31(2) of SEBI (LODR) Regulations, hundred percent shareholding of promoters and promoter group is not maintained in dematerialized form

However, until FY2025, the shares have not been converted into 100% demat.

Annual Secretarial Compliance Report for the year ended on 31st March, 2025, page 6:

As per representation received…few shares of one of the promoter is in physical mode and the same will be dematerialized soon.

In addition, on numerous other occasions, Vadilal Industries Ltd did not meet corporate governance norms.

For example, the results submitted by the company for the June 2024 quarter were not in the format specified by SEBI.

Annual Secretarial Compliance Report for the year ended on 31st March, 2025, pages 4-5:

Financial results submitted for the quarter ended on 30th June, 2024 was not as per format prescribed by SEBI

As per the FY2024 annual report, page 90, the title deeds of multiple properties are not available with the company.

FY2024 annual report, page 90:

The title deeds are not readily available. In the revenue records it is in the name of the Company.

Original title deeds are not readily available.

In FY2022, the company did not file the annual return on foreign liabilities and assets required under FEMA.

FY2022 annual report, page 60:

Annual Return on Foreign Liabilities and Assets under the Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder is not filed.

In FY2020, Vadilal Industries Ltd did not update the proper composition of its nomination and remuneration committee in its corporate governance report.

Annual Secretarial Compliance Report for the year ended on 31st March 2021, page 3:

in the Corporate governance report for the quarter ended 31st March, 2020 NRC composition was not updated properly.

In FY2020, the company did not appoint its chief operating officer in time and incurred a delay of 73 days.

FY2020 annual report, page 80:

The casual vacancy of whole-time KMP (CEO) under section 203 of the Act was filled-up by the Board with a delay of 73 days.

In FY2019, the company did not complete the evaluation of the board and its committees on time.

FY2019 annual report, page 57:

As required under…Regulations, performance evaluation of the Board as a whole, individual directors…and various Committees…was not done and it was under process.

In FY2021, Vadilal Industries Ltd delayed its disclosure of credit rating to stock exchanges.

FY2021 annual report, page 62:

There was a delay in disclosure of revision in credit ratings by CARE and IND-RA to BSE and NSE as required under Regulation 30(6) of LODR Regulations.

Also read: How to study Annual Report of a Company

8) Data presented by Vadilal Industries Ltd in its annual reports:

At times, the data provided by the company in its annual reports does not seem correct, making investors uncertain about taking decisions based on the data.

For example, in the FY2023 annual report, Vadilal Industries Ltd stated that the total Indian ice-cream market size, including organized and unorganized segments, is about ₹32,000 cr and out of it, the organized market segment is about ₹20,000 cr.

FY2023 annual report, page 29:

Today, the total organized Indian ice cream market is estimated at approx. ₹ 20,000 crores…overall organized & unorganized ice market are estimated near about ₹ 32,000 crore

However, in the very next annual report, FY2024, the company stated that the overall Indian ice-cream market size is about ₹20,000 cr and organized players constitute about 60%, i.e. about ₹12,000 cr.

FY2024 annual report, page 18:

The Indian ice-cream market size is over Rs 20,000 crore and organized players account for about 60% in it…In the last five years India’s per capita annual consumption of ice cream has increased to 400 ml from 200 ml which is significant.

Vadilal Industries Ltd also highlighted that over the years, per capita ice-cream consumption has almost doubled. Therefore, it comes as a surprise to note that while per capita consumption of ice-cream is increasing, still, as per the company, overall market size declined from ₹32,000 cr in FY2023 to ₹20,000 cr in FY2024 and the size of organized players declined from ₹20,000 cr in FY2023 to ₹12,000 cr in FY2024.

As a result, we believe that investors should be extra cautious while making investment decisions based on the data in the annual reports of Vadilal Industries Ltd and contact the company directly if they find any discrepancies.

The Margin of Safety in the market price of Vadilal Industries Ltd:

Currently (June 16, 2025), Vadilal Industries Ltd is available at a price-to-earnings (PE) ratio of about 25.5 based on consolidated earnings of FY2025.

We recommend that an investor read the following articles to assess the PE ratio to be paid for any stock, which considers the strength of the business model of the company as well. The strength in the business model of any company is measured by way of its self-sustainable growth rate and the free cash flow generating ability of the company.

In the absence of any strength in the business model of the company, even a low PE ratio of the company’s stock may be a sign of a value trap, where instead of being a bargain, the low valuation of the stock price may represent the poor business dynamics of the company.

• 4 Principles to Decide the Ideal P/E Ratio of a Stock for Value Investors
• How to Earn High Returns at Low Risk – Invest in Low P/E Stocks
• Hidden Risk of Investing in High P/E Stocks

Analysis Summary

Overall, Vadilal Industries Ltd has grown its sales at a healthy rate of 12% year-on-year during (FY2015-FY2025). However, an in-depth analysis of the company reveals that, despite its legacy and brand recognition, it has consistently struggled with structural, operational, and governance challenges.

The company operates in a very volatile and intensely competitive business environment. It faces immense pricing pressure in both the ice cream and frozen foods segments due to numerous competitors in a highly fragmented market: from deep-pocketed multinationals to unorganized local players.

In international markets, the company faces challenges due to subsidies by foreign governments to their producers, while Indian frozen foods face high import duties. Consumers’ perception of frozen foods as inferior and susceptibility to misinformation (as seen during Covid-19) add to its challenges.

Vadilal Industries Ltd’s inability to pass on cost increases due to this competition has historically led to wildly fluctuating margins and even net losses. Investors should be cautious while assuming the sustainability of recent profitability improvements, as past expansions and scale benefits have quickly eroded under intense price-based competition.

To counter these challenges, the company has employed multiple strategies—capacity expansions, premiumization through outlets like “Melt In”, entry into cafés, focus on exports, and heavy advertisement spending with celebrity endorsements. However, most of these initiatives seem more defensive than transformative, as they only serve to maintain market position rather than propel significant market share growth. In fact, over the years, the market share of Vadilal Industries Ltd has declined from 20% to 10%.

Vadilal Industries Ltd’s business is capital-intensive with heavy working capital requirements. Seasonality in sales leads to stockpiling before summer, and any disruption (e.g., Covid lockdowns) can cause liquidity crises. The company has historically relied heavily on debt, and in times of stress, it has often defaulted on its loans. From FY2001 to FY2006, Vadilal underwent repeated loan restructurings and even one-time settlements with lenders, which show clear signs of distress. During these periods, surprisingly, the company continued to invest funds into equity investments or declared dividends, raising questions about capital allocation.

Working capital management of the company remains fragile. The company continuously reports inventory write-downs every year due to perishability. Receivable days have nearly doubled over the past decade, indicating weaker collections. Despite positive free cash flows in recent years, an investor should closely watch its sustainability as the new capex projects are again debt-funded.

The analysis shows many corporate governance concerns. A long-standing dispute among promoter families—Virendra, Rajesh, and Devanshu Gandhi—led to court battles, allegations of fund siphoning, and disruption of potential strategic deals. A recent NCLT order forced equal division of business among families, which seemingly led to a settlement between the families. However, an investor should be cautious and continuously monitor whether the peace in the erstwhile warring families lasts long.

In the past, internal investigations—like the one probing misuse of company funds for personal expenses—have been inexplicably delayed for six years and conveniently concluded just after family reconciliation.

Related-party transactions of Vadilal Industries Ltd are another area of concern. The company sells products through a group entity, Vadilal Enterprises Ltd (VEL) and has let go of control over final product pricing and customer relationships. It gives corporate guarantees, extended credit, and even financial concessions/discounts to VEL.

The company also attempted to buy the “Vadilal” brand from the promoters for hundreds of crores. Such transactions always raise questions on valuation and promoters’ motives. Similarly, an investor should be cautious about repeated asset transfers and loans to group entities.

Moreover, aggressive accounting practices, past regulatory penalties, and equal salaries among promoter directors (decided by mutual agreements, not performance) indicate that promoters might be more focused on internal family balancing and ignore what might be best for the public/minority shareholders.

Going ahead, an investor should focus on the sustainability of profit margins and working capital position, as well as the debt-funded capital expansion plans of the company. The investor should keep checking whether the company is able to generate free cash flows. She should keep monitoring signs indicating family relations of promoters and all their related party transactions, including the purchase of assets/brand from promoter entities and promoters’ remunerations.

Further recommended reading: How to Monitor Stocks in your Portfolio

These are our views on Vadilal Industries Ltd. However, investors should do their own analysis before making any investment-related decisions about the company.

You may use the following steps to analyse the company: “Selecting Top Stocks to Buy – A Step by Step Process of Finding Multibagger Stocks”

I hope it helps!

Regards,
Dr Vijay Malik

Disclaimer

Registration status with SEBI:

I am registered with SEBI as a research analyst.

Details of financial interest in the Subject Company:

I do not own stocks of the companies mentioned above in my portfolio at the date of writing this article.

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