Dodla Dairy Limited announced its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025. The Board of Directors approved these results at their meeting held on January 27, 2026, following review by the Audit Committee and limited review by statutory auditors S.R. Batliboi & Associates LLP.

Standalone Financial Performance

The company's standalone operations showed mixed results for Q3FY26. While net profit increased quarter-on-quarter, revenue from operations experienced a decline.

For the nine months ended December 31, 2025, standalone revenue reached ₹25,767.83 million compared to ₹25,336.63 million in the corresponding period of the previous year, marking a 1.7% increase. Net profit for the nine-month period stood at ₹1,729.30 million versus ₹1,902.79 million in the previous year.

Consolidated Results Show Strong Performance

The consolidated financial results demonstrated robust growth, particularly in revenue from operations, benefiting from the acquisition of HR Food Processing Private Limited (Osam Dairy).

For the nine months ended December 31, 2025, consolidated revenue from operations reached ₹30,507.29 million compared to ₹28,104.42 million in the previous year, representing an 8.5% growth. Consolidated net profit for the nine-month period was ₹1,972.73 million versus ₹1,919.65 million in the corresponding period.

Management Commentary on Operational Challenges

During the earnings conference call held on January 28, 2026, Managing Director Dodla Sunil Reddy highlighted key operational challenges that impacted the quarter's performance. The company faced significant procurement cost pressures, with milk procurement costs increasing by ₹2.50 per liter sequentially due to industry-wide milk supply shortage caused by erratic rainfall.

The management noted that procurement cost increases were particularly severe in Maharashtra (10% increase) compared to other states (6-7% increase). The company chose not to fully pass on these cost increases to maintain market share during the subdued winter demand period.

Key Financial Highlights and Exceptional Items

The quarter's results were influenced by two significant one-time items that impacted the financial performance:

Exceptional Items:

• Implementation of New Labour Codes resulted in exceptional charges of ₹56.27 million (standalone) and ₹56.92 million (consolidated)
• These charges represent estimated one-time increases in employee benefit provisions due to legislative amendments

Tax Adjustments:

• Favorable income tax appellate tribunal orders resulted in prior period tax adjustments of ₹218.24 million (standalone) and ₹218.81 million (consolidated)
• These adjustments relate to transfer pricing matters for earlier assessment years

Earnings Per Share and Segment Performance

The company's earnings per share performance reflected the mixed operational results:

The consolidated segment-wise revenue analysis shows the geographical distribution of operations, with India contributing ₹8,925.26 million and international operations contributing ₹1,325.15 million during Q3FY26.

Strategic Expansion Plans and Outlook

The company outlined significant expansion plans during the earnings call. The Maharashtra project is progressing as scheduled and is expected to start commercial operations by end of FY27, with ₹69.00 million already invested out of the planned ₹2,800.00 million total capex.

The acquisition of HR Food Processing Private Limited (Osam Dairy) for ₹2,710.00 million, completed in August 2025, has been consolidated from August 1, 2025. The transaction resulted in recognition of net assets of ₹1,393.68 million and goodwill of ₹1,316.32 million, contributing to the enhanced consolidated performance.

Management expects margin improvement in upcoming quarters as seasonal demand patterns normalize and the company implements strategic pricing adjustments to offset procurement cost pressures.

Dodla Dairy has emerged as a notable investment story in the FMCG sector, with HDFC Small Cap Fund demonstrating sustained confidence through consistent stake increases over the past three quarters. The institutional investor's progressive accumulation strategy reflects growing conviction in the integrated dairy company's fundamentals and market positioning.

Systematic Stake Building Strategy

The fund's investment pattern reveals a methodical approach to building its position in Dodla Dairy. The stake progression demonstrates institutional confidence in the company's long-term prospects.

The quarterly additions in June, September, and December 2025 indicate a gradual accumulation strategy typical of long-term institutional investors seeking to build positions without creating market disruption.

Financial Performance Overview

Dodla Dairy's recent financial results demonstrate steady operational performance across key metrics. The company's revenue growth and profitability trends support the institutional investor's confidence.

Business Composition and Market Presence

The company's revenue structure reflects a diversified product portfolio with strong emphasis on core dairy products. Milk sales dominate the revenue mix, while value-added products contribute meaningfully to the overall business.

Revenue Breakdown (Q2 FY26)

• Milk Sales: 70% of total sales
• Curd Sales: 20% of total sales
• Other Value-Added Products: 7% of total sales
• Bulk Sales: 3% of total sales

Dodla Dairy operates as an integrated dairy company that procures, processes, and sells milk and milk products. The company's product range includes buttermilk, ghee, curd, paneer, flavoured milk, doodh peda, lassi, ice cream, and milk-based sweets under the Dodla, Dodla Dairy, and KC+ brands.

Distribution Network and Market Reach

The company has established a comprehensive distribution network spanning traditional and modern retail channels. This multi-channel approach supports urban market penetration and accessibility.

Digital and E-commerce Platforms

• Flipkart, Zomato, Zepto
• Blinkit, Swiggy Instamart

Organized Retail Partners

• DMart, Reliance Retail, Metro
• Ratnadeep, Lulu, Value Zone
• Today's Basket, Q-Mart

Market Valuation and Performance

Dodla Dairy shares trade at a PE ratio of 28.20, compared to the industry PE of 27.10. The stock has delivered substantial returns since its public listing, generating 110% returns since July 2021. The current market positioning reflects investor confidence in the company's growth trajectory and operational execution capabilities.

The systematic stake building by HDFC Small Cap Fund, combined with the company's diversified product portfolio and expanding distribution network, positions Dodla Dairy as a significant player in India's dairy sector with strong institutional backing.