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.

Dodla Dairy Limited has secured a significant victory in the Karnataka High Court regarding the GST classification of its flavored milk products. The court's ruling on December 30, 2025, addresses a dispute that has been ongoing since 2022, providing substantial financial relief to the dairy company.

Court Ruling Details

The Karnataka High Court quashed previous GST orders dated July 25, 2022, and April 25, 2023, that had classified flavored milk under an unfavorable tax category. The court's decision establishes the correct GST classification for flavored milk products and provides clear direction on tax rates.

Financial Impact

The favorable ruling will have a positive impact on Dodla Dairy's financial position. The company had been operating under the higher tax regime following the disputed classification orders.

The ₹2.03 crores represents provisions that had been accounted for in the company's books due to the disputed classification. The ₹1.47 crores refund amount consists of taxes that Dodla Dairy had paid under protest during the dispute period.

Implementation Timeline

The Karnataka High Court has directed the tax authorities to process the refund within a specific timeframe. The refund of taxes paid under protest, along with applicable interest, must be completed within three months from the date of receipt of the court order.

Regulatory Compliance

Dodla Dairy disclosed this development in compliance with Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The disclosure was made on December 31, 2025, following the court's ruling on December 30, 2025. The company confirmed that no violations or contraventions were committed in this matter, as the dispute centered on the interpretation of GST classification rules rather than any compliance issues.