Submitted by:

Akash Arora

NEER UDYOG LIMITED

Chetan Sidana
Dushyant Raj Verma
Nikki Latta
Puneet Garg
Sanyam Grover
INTRODCUTION
1. BOTTLED WATER MANUFACTURER
2. FIRST ONE TO LAUNCH THE PRODUCT 15 YEARS AGO ARND
1990
3. TOTAL MARKET VALUE TOUCHED Rs. 1000 Cr
4. STARTED FACING INTENSE COMPETITION WHEN MNCs ENTERED
THE BOTTLED WATER SEGMENT
ADVANTAGES MNCS HAD OVER NEER
UDYOG LTD
1. WERE ALREADY MANUFACTURING AND SELLING AERATED SOFT
DRINKS PAN INDIA
2. WELL ESTABLISHED DISTRIBUTION NETWORK
3. CHEAP CAPITAL
CHALLENGES BEING FACED BY NEER
UDYOG LTD
1. COMPETION FROM
2. REGIONAL PLAYERS
3. MNCs ENTERED THE MARKET
4. CONSOLIDATION OF OTHER PLAYERS THIS WAS EATING INTO
ITS MARKET SHARE
SHOULD NEER UDYOG GO AHEAD WITH
THE LENGTHENING OF ITS CREDIT TERMS?
1. EXISTING 1 MONTH
CREDIT, NO DISCOUNT
2. EXPECTED INC IN SALES
5%
3. 1/10, 60 DAYS
4. EXPECTED INC IN SALES -
15% INC IN SALES
 SALES PROJECTION TABLE 1
MONTHS ACTUAL PROJECTED 15% INC PROJECTED 10% INC
1 25.45 29.2675 27.995
2 27.25 31.3375 29.975
3 30.45 35.0175 33.495
4 32.6 37.49 35.86
5 32.7 37.605 35.97
6 33.5 38.525 36.85
7 27.25 31.3375 29.975
8 22.4 25.76 24.64
9 17.3 19.895 19.03
10 17.5 20.125 19.25
11 20.45 23.5175 22.495
12 24.65 28.3475 27.115
311.5 358.225 342.65
31.15
8.955625
Bad DEBT Percentage 0.0176 0.017391 0.015686 0
BAD DEBT 0.11 0.12 0.12
CREDIT SALES 2.433706 2.420543 2.531771
%OF cc 24.64 24.78261 23.66013 25

2004 2005 2006 2007

COLLECTION COST 1.54 1.71 1.81 2.238906

NET SALES 256.81 285.06 302.16 358.225
RECEIVABLES 6.25 6.9 7.65 8.955625
360 87041.67

TURNOVER 8.761341 8.713955 9.114376

 ASSUME RISK RATE 10

COSTS

BAD DEBT 8955.625

CASH DISCOUNT 342650
BLOCKAGE OF FUNDS 8704.1
COLLECTION COSTS 149260.4

TOTAL COST 509570.1

BENEFIT Rs. Lakhs

INC IN SALES 31.15

TOTAL REVENUE 3115000

SURPLUS 2605430