Milkfood Limited reported a net profit of ₹442.9 crore for the financial year ended March 31, 2026 (FY26), a significant increase from ₹45.2 crore in the previous year. The surge was primarily driven by non-operating gains from the sale of its Moradabad plant and the revaluation of land assets at its Patiala unit.

Revenue from operations declined 8% to ₹4,129.3 crore, down from ₹4,477.6 crore in FY25. The Board of Directors recommended retaining profits for business expansion and declared no dividend for the year.

Financial Performance

The company’s operating performance faced headwinds, but substantial other income masked the decline in core operations.

Other income rose sharply to ₹716.6 crore from ₹18.8 crore in FY25. This included a profit of ₹475.9 crore from the sale of the Moradabad plant and a revaluation surplus of ₹319.7 crore on Patiala land. While revenue dipped due to lower product sales, the gain on asset disposal significantly boosted the bottom line.

Balance Sheet and Cash Flow

Milkfood strengthened its balance sheet through debt reduction. Total borrowings decreased to ₹10,717 crore (₹2,687 crore long-term and ₹8,030 crore short-term) from ₹11,299 crore in FY25. Net debt stood at ₹10,616 crore as on March 31, 2026.

Cash flow from operating activities turned negative at (₹1,051.1 crore), compared to an inflow of ₹192.4 crore in FY25. However, investing activities generated a strong inflow of ₹1,259.3 crore, largely from proceeds of ₹1,300.8 crore from the sale of property, plant, and equipment.

Governance and Corporate Actions

The company held its 53rd Annual General Meeting on September 24, 2026. Key resolutions included:

• Adoption of audited financial statements for FY26.
• Reappointment of Mr. Harmesh Mohan Sood as a Non-Executive Non-Independent Director.
• Ratification of remuneration for cost auditors M/s HMVN & Associates.

Subsequent to the financial year close, the Board allotted 12.18 lakh equity shares under the Employee Stock Option Plan 2024. Additionally, the company received shareholder approval for the preferential allotment of up to 22 lakh convertible warrants at ₹30 each.

What the Numbers Show

The financial results highlight a divergence between operational performance and reported profitability. While revenue from operations contracted by 8%, net profit expanded nearly ninefold. This disparity is entirely attributable to exceptional items: the ₹475.9 crore gain on the Moradabad plant sale and the ₹319.7 crore land revaluation surplus constituted the vast majority of the pre-tax profit. Operational cash flow also deteriorated significantly, turning negative despite the balance sheet improvement driven by asset sales. Investors should note that the core dairy business saw reduced top-line growth, with profitability heavily dependent on one-time capital restructuring events.

Milkfood reported a net profit of ₹22 lakh for the quarter ended June 30, 2026, marking a return to profitability after posting a net loss of ₹69 lakh in the corresponding period of FY26. The company’s revenue from operations rose 10.3% year-on-year to ₹8,122 lakh, up from ₹7,366 lakh in Q1FY26. This turnaround is significant for shareholders as it indicates improved operational efficiency despite thin margins, supported by a reduction in finance costs and controlled operating expenses.

The Board of Directors approved the unaudited standalone financial results on August 7, 2026, pursuant to Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were reviewed by Madan & Associates, Chartered Accountants, the statutory auditors of the company, who issued an unmodified review report under Standard on Review Engagements (SRE) 2410. The company also submitted newspaper clippings dated July 8, 2026, containing the financial results to the BSE Limited, pursuant to Regulation 47 of the SEBI (LODR) Regulations, 2015.

Financial Performance

Total income for the quarter stood at ₹8,211 lakh, comprising ₹8,122 lakh from operations and ₹89 lakh from other income. In contrast, total income in Q4FY26 was ₹24,493 lakh, heavily influenced by ₹6,600 lakh in other income during that period. Total expenses were ₹8,159 lakh, including ₹7,674 lakh for cost of materials consumed and ₹478 lakh for employee benefits. Finance costs decreased to ₹225 lakh from ₹322 lakh in Q1FY26.

Key Disclosures and Risks

The auditor’s report included an emphasis of matter regarding several key items. Trade receivables include a claim of ₹78 lakh against an entity facing insolvency proceedings before the NCLT; the company has written off ₹22 lakh as a precautionary measure but expects recovery. Exceptional expenses of ₹23 lakh were recorded, representing share-based payment expenses treated as exceptional items under Ind AS 102.

Other income included a ₹80 lakh fair value gain on biological assets (trees and plantation), certified by management based on an agriculture scientist’s report. Additionally, the company capitalized ₹61 lakh in expenses towards capital work-in-progress for qualifying assets under Ind AS 23.

What the Numbers Show

The primary driver of the quarterly profit turnaround was not just top-line growth but a significant reduction in non-operational volatility. While revenue grew modestly by 10.3%, the absence of large one-time losses or high exceptional expenses allowed the company to retain its operating margin. However, the reliance on other income remains a variable factor; the drop in other income from ₹555 lakh in Q1FY26 to ₹89 lakh in Q1FY27 highlights the normalization of earnings. Contingent liabilities remain high at ₹4,579 lakh, primarily due to pending GST appeals involving demands of ₹1,896 lakh and interest receivable disputes, which pose potential future cash flow risks if not resolved favorably.