Dodla Dairy Limited , a leading dairy company in South India, reported its highest-ever quarterly revenue of ₹1,007.00 crores in Q1, marking a 10.5% year-on-year growth. However, the company faced margin pressure due to early monsoon conditions and fluctuating procurement costs.

Financial Performance

The company's EBITDA margin compressed to 8.2%, while the PAT margin stood at 6.2% for the quarter. Despite the challenges, Dodla Dairy achieved a net profit of ₹63.00 crores.

Operational Highlights

• Milk procurement reached a record level of 18.7 lakh liters per day.
• Average procurement costs rose to ₹37.38 per liter from ₹34.15 per liter in the same period last year.
• Curd sales declined by 3.2% year-on-year.
• Bulk sales of SMP and butter increased to ₹57.70 crores from ₹35.50 crores.

Segment Performance

Value-Added Products (VAP)

The VAP segment, excluding bulk sales, grew by 4% year-on-year, reaching ₹289.00 crores compared to ₹278.00 crores in the previous year. However, seasonal products like lassi and buttermilk saw a significant decline due to early monsoon conditions.

Africa Business

The Africa business grew by 26.9% in revenue but experienced lower EBITDA margins at 13% due to strategic pricing at the new Kenya plant. The company is focusing on capturing market share in Kenya, with current operations at 65,000-70,000 liters per day capacity utilization.

Orgafeed Business

Orgafeed continued its strong performance with a 29.4% revenue growth and 84.4% EBITDA growth, achieving 17.6% margins. The company expects this segment to maintain its growth trajectory.

Strategic Developments

Dodla Dairy has approved the acquisition of a 100% stake in HR Food Processing (OSAM brand) to expand its presence in the Bihar and Jharkhand markets. This move aligns with the company's inorganic growth strategy.

Outlook

Mr. Dodla Sunil Reddy, Managing Director of Dodla Dairy, commented on the results: "We expect margin improvement in Q2 as lower procurement prices take effect. Our focus remains on enhancing procurement strength, widening our product portfolio, and expanding our distribution reach in new and existing markets."

The company anticipates a 10-15% top-line growth and 15-20% growth in absolute EBITDA or PAT for the coming year. Dodla Dairy expects higher growth rates in the Africa and Orgafeed businesses compared to its India operations.

Conclusion

While Dodla Dairy faces short-term challenges due to seasonal factors and procurement cost fluctuations, the company remains optimistic about its growth prospects. With strategic expansions and a focus on value-added products, Dodla Dairy aims to strengthen its market position in the coming quarters.

Dodla Dairy Limited , a leading integrated dairy company, has reported its financial results for the latest quarter while also providing insights into its future growth expectations. The company faces both opportunities and challenges as it navigates through market conditions and strategic expansions.

Financial Performance

Dodla Dairy achieved a quarterly revenue of ₹1,006.00 crore, demonstrating the company's strong market presence. The net profit for the quarter stood at ₹62.80 crore, with margins at 8.20%. However, the company experienced pressure on gross margins due to high procurement costs and seasonal weakness in value-added products, which comprise 36% of revenues.

Future Growth Projections

Managing Director Sunil Reddy has outlined ambitious growth targets for the company:

• Revenue growth of 10-15% expected in FY26
• Profit growth projected at 8-10% for FY26

Market Dynamics and Strategy

Several factors are influencing Dodla Dairy's performance and strategy:

1. Procurement Costs: The company faced pressure from high procurement costs, but prices began easing in July, supporting expectations of margin recovery without further increases in consumer prices.

2. Market Expansion: Dodla Dairy currently holds a 6-7% market share in southern markets and is increasing advertisement spending and hiring to deepen its market presence.

3. Acquisition Impact: The recent acquisition of Osam Foods is expected to contribute ₹150.00-200.00 crore to topline growth, enhancing the company's market position.

4. Procurement Capacity: Current procurement capacity stands at 18 lakh litres per day, with plans to expand to 19-20 lakh litres, indicating the company's focus on scaling operations.

Management Commentary

Sunil Reddy, Managing Director of Dodla Dairy, expressed optimism about the company's future performance, highlighting the expected growth in both revenue and profit for FY26. He also noted the positive impact of easing procurement prices on margin recovery.

Market Position

As of the latest trading session, Dodla Dairy's stock was priced at ₹1,334.10, with a market capitalization of ₹8,067.00 crore. This valuation reflects investor confidence in the company's growth prospects and market position.

Conclusion

Despite facing margin pressures and challenges in the current market environment, Dodla Dairy remains focused on growth and expansion. The company's strategic moves, including the Osam Foods acquisition and plans to increase procurement capacity, along with its strong market share in southern India, position it well for future growth. As Dodla Dairy continues to navigate through market dynamics, investors and industry observers will be watching closely to see how these strategies translate into financial performance in the coming years.