Crop & Food Science
Commercial Due Diligence for Japanese Conglomerate Investing in Indian Poultry Company
Client Challenge
The client, a global trading company with interests in food and agriculture, aimed to strategically invest in an Indian poultry company. To assess the feasibility of this investment, the client engaged UC to conduct a commercial due diligence exercise. The goal was to understand the target company’s revenues, cost structure, sourcing dynamics, and market positioning.
Our Approach
- Primary Research Interviews:
- Conducted on-ground interviews with retailers, traders, and other customers in the states where the target operates.
- Gathered insights on the target’s market position, key competitors, purchasing criteria, and consumer preferences.
- Farmers Interviews:
- Conducted interviews with agricultural and poultry farmers to understand purchasing patterns, price fluctuations, selling criteria, and stock surplus/deficit.
- Cost Economics Analysis:
- Formulated the cost economics of the target and compared it with competitors to identify areas for improvement.
- Identified key cost drivers and analyzed their trends to forecast future cost movements.
- Financial Forecasting:
- Analyzed management profitability forecasts to validate assumptions.
- Segmented revenue and costs into variables (capacity, utilization, volumes, prices, etc.) for each revenue-generating business of the target.
- Generated a financial forecast for the target’s profitability from FY 2022-23 to FY 2032-33.
Our Impact
- Detailed insights into the Indian poultry market, including market size and landscape.
- Financial analysis results showing the target’s position and expected profitability over the forecast period.
- Insights on market positioning across revenue-generating businesses, highlighting challenges and potential solutions for improving profitability.