Mumbai: Dodla Dairy reported a sharp decline in profitability for the first quarter of FY27, with consolidated net profit falling 35.4% year-on-year (YoY) to ₹40.6 crore, as elevated milk procurement prices continued to weigh on margins despite robust revenue growth.
The dairy company’s revenue from operations increased 19% YoY to ₹1,197.9 crore during the quarter, driven by healthy volume growth across procurement and sales. Milk procurement volume rose 13% YoY to 21.1 lakh litres per day (LLPD), while milk sales volume increased 14.5% YoY to 13.6 LLPD.
However, rising input costs offset the benefits of higher sales. Dodla Dairy said milk procurement prices increased at a faster pace than realization prices, keeping gross margins under sustained pressure.
Consequently, EBITDA declined 21.3% YoY to ₹64.9 crore, while the EBITDA margin contracted 280 basis points to 5.4% during the June 2026 quarter.
Strategic Investment in Sids Farm
In a move to strengthen its presence in the premium dairy segment, the company’s board approved an investment of ₹11.6 crore to acquire a 2% stake in Sids Farm, valuing the company at a pre-money valuation of ₹500 crore.
Sids Farm is known for its premium antibiotic- and hormone-free dairy products and has built a strong direct-to-consumer (D2C) and e-commerce presence across multiple markets.
Dodla Dairy said the investment aligns with its core dairy business and offers strategic exposure to the rapidly expanding premium dairy category while supporting the growth of a differentiated consumer brand.
Management Outlook
Commenting on the quarterly performance, Dodla Sunil Reddy, Managing Director of Dodla Dairy, said the company prioritized strengthening milk procurement during the quarter to build inventory for the coming months and safeguard market share, even as procurement prices remained elevated.
He added that the company’s strategy reflects broader industry trends and expressed confidence that milk procurement prices are expected to begin normalizing from the second quarter onwards.
Reddy highlighted that an extended summer season boosted demand for the company’s value-added products (VAP), including curd, buttermilk, lassi, and ice cream, with the segment contributing nearly one-third of total sales, marking a record performance.
He also noted operational improvements in the company’s Africa, OSAM, and Orgafeed businesses, although the standalone business continued to face pressure from higher procurement costs and pricing challenges.
Looking ahead, Dodla Dairy remains focused on expanding processing capacity, strengthening its geographic footprint, widening distribution, and increasing the share of value-added products to improve profitability and diversify its product portfolio.
Stock Performance
Shares of Dodla Dairy ended 1.24% higher at ₹1,052.75 on the BSE on Friday, even as investors assessed the impact of margin pressures against the company’s long-term expansion strategy and premium dairy investments.
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