New Delhi, January 27: Milkfood Ltd., one of India’s established dairy companies, has announced the sale of its Moradabad plant at Agwanpur, Uttar Pradesh, for a consideration of ₹130 crore. The company informed stock exchanges that it has signed an Agreement to Sell as part of its ongoing business reorganisation and balance-sheet strengthening strategy.
The transaction has resulted in a net cash inflow of ₹116.11 crore after taxes. Milkfood reported a net profit of ₹78.04 crore on the sale of land, a profit of ₹7.54 crore on buildings, and no loss on plant and machinery. A reversal of ₹37.37 crore from revaluation reserves has been recorded as a non-cash accounting adjustment.
Debt Reduction and Cost Savings
Milkfood plans to utilise a major portion of the proceeds to reduce debt. The company intends to repay loans worth ₹75 crore, which is expected to lower annual finance costs by approximately ₹9.25 crore. Additionally, savings on plant overheads are estimated at ₹8.5 crore per year, taking the total annual benefit to around ₹17.75 crore.
The company stated that these measures are likely to result in a net EPS accretion of about ₹7.25 per share (face value ₹5), highlighting the immediate positive financial impact of the asset sale.
Commenting on the development, Sudhir Avasthi, Managing Director, Milkfood Ltd., said the transaction reflects a disciplined approach to capital allocation, enabling the company to reduce debt, improve cash flows, and create room for future growth initiatives.
Focus Shifts to Growth Segments
With a stronger balance sheet and lower leverage, Milkfood is now focusing on expanding high-growth, high-margin dairy categories. The company is planning investments in new capacities, including ice-cream manufacturing, and is evaluating opportunities in cheese and butter segments, which continue to see strong demand across urban and semi-urban markets.
Read More: Global Dairy Prices Rise Despite Abundant Milk Supply
Operationally, Milkfood also plans to scale up production at its Patiala plant. The company estimates that overall turnover could reach ₹750 crore by FY 2026–27, with an expected EBITDA margin of around 7%.
Strategic Reset
The sale of the Moradabad asset marks a strategic reset for Milkfood Ltd. By reducing debt and improving earnings visibility, the company believes it is better positioned to strengthen its competitive standing and enhance shareholder value in India’s evolving dairy market.
About Milkfood Ltd
Milkfood Ltd. is a well-known Indian dairy company with decades of experience in delivering value-added dairy products. With expertise spanning sourcing, processing, packaging, and distribution, the company continues to expand its presence while maintaining a strong focus on quality, consistency, and innovation.
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