Parag Milk Foods Limited (PMFL), a leading dairy-FMCG company in India, has reported robust financial results for the quarter ended September 30, marking significant growth across key financial metrics.

Record-Breaking Revenue

The company achieved a milestone by crossing the Rs 1,000 crore mark in quarterly revenue for the first time. PMFL reported a consolidated revenue of Rs 1,008.00 crores, representing a strong 16% year-over-year growth in value and 10% growth in volume.

Profit Surge

Parag Milk Foods witnessed a substantial 56% year-over-year increase in Profit After Tax (PAT), which rose to Rs 46.00 crores.

Financial Highlights

Half-Year Performance

For the half-year period, revenue reached Rs 1,859.00 crores with 14% value growth and 8% volume growth. The Gross Profit Margin improved to 25.8% from 23.6% in the previous year.

Operational Performance

The company handled an average of 14 lakh liters of milk per day during the quarter, with average milk prices at Rs 38.00 per liter.

Product Portfolio Performance

• Core categories, including Ghee, Cheese, and Paneer, witnessed a strong volume growth of 14%.

New Age Business Growth

The company's new age businesses, Pride of Cows and Avvatar, recorded a robust 79% growth and now constitute 9% of the overall business.

Debt Reduction

PMFL has made significant strides in reducing its debt. The company reduced net debt by Rs 125.00 crores during the half-year, bringing consolidated net debt down from Rs 561.00 crores to Rs 436.00 crores.

Corporate Action

The company converted Foreign Currency Convertible Bonds held by IFC, allotting 87,38,713 equity shares at Rs 135.00 per share.

Future Outlook

With a strong performance in Q2, Parag Milk Foods appears well-positioned to capitalize on the growing demand in the Indian dairy sector. The company's focus on core categories and new age businesses, coupled with its debt reduction efforts, sets a positive tone for future growth.

Parag Milk Foods Limited , a prominent player in the Indian dairy industry, has recently been hit with penalty orders totaling Rs 6.14 lakh from the Food Safety and Standards Authority of India (FSSAI). The penalties were imposed across two locations for alleged substandard products, though the company maintains that the products were fit for consumption.

Penalty Details

The FSSAI imposed penalties under section 51 of the Food Safety and Standards Act, 2006. Here's a breakdown of the penalties:

Nature of Violations

According to the company's disclosure, the penalties were levied for alleged substandard products that did not meet standard specifications. However, it's important to note that despite these allegations, the products were deemed fit for consumption. The samples in question were picked from retail stores, suggesting that the issues were identified during routine market checks rather than at the production stage.

Company's Response

Parag Milk Foods has stated that there is no material impact on its operations or other activities due to these penalty orders. The company has also reserved the right to file appeals against the orders at appropriate forums, indicating that it may contest the FSSAI's findings.

Financial Impact

While the total penalty amount of Rs 6.14 lakh is not insignificant, the company has clarified that the financial impact is limited to the extent of the penalty levied. This suggests that Parag Milk Foods does not anticipate any broader financial repercussions from these incidents.

Regulatory Compliance

The company promptly informed the stock exchanges about these penalties, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This transparency is crucial for maintaining investor trust and adhering to regulatory standards.

Conclusion

As the dairy industry faces increasing scrutiny over product quality and safety standards, this incident highlights the ongoing challenges in maintaining consistent product specifications. While Parag Milk Foods maintains that its products were fit for consumption, the penalties serve as a reminder of the strict regulatory environment in which food companies operate. The company's response to these penalties and any potential appeals against the FSSAI's orders may be of interest to both investors and consumers.