Dodla Dairy Limited reported its Q1 FY26 results, with revenue crossing the ₹1,000 crore mark for the first time, reaching ₹1,007 crore, a 10.5% year-on-year growth. The company’s EBITDA margin stood at 8.2%, and the PAT margin was 6.2%. The earnings call transcript provides detailed insights into the company’s performance, strategies, and future outlook.
| Metric | Q1 FY26 | Q1 FY25 | YoY Change |
|---|---|---|---|
| Revenue from Operations | 1,007 | 912 | +10.5% |
| Gross Profit | 260 | N/A | N/A |
| EBITDA | 83 | N/A | N/A |
| Net Profit | 63 | N/A | N/A |
Financial Performance
Dodla Dairy’s Q1 FY26 saw a revenue from operations of ₹1,007 crore, marking the highest ever revenue in any quarter with a year-on-year growth of 10.5%. The company delivered a gross profit of ₹260 crore, with a gross profit margin of 25.8%. Employee expenses increased by 19.4% to ₹47 crore, primarily due to annual increments and the addition of new employees. The EBITDA for the quarter stood at ₹83 crore, with a margin of 8.2%. The net profit for the quarter was ₹63 crore, with a net profit margin of 6.2%.
Operational Highlights
The company’s milk procurement reached an all-time high of around 18.7 lakh liters per day on average, compared to 17.6 lakh liters per day in the same period last year. The average procurement cost for Q1 FY26 was ₹37.38 per liter, compared to ₹34.15 per liter in Q1 FY25. The average milk sales for the quarter were 11.9 lakh liters per day, an increase of 4.9% compared to Q1 FY25. The VAP sales contribution during the quarter stood at 36.2% of sales, with curd sales at 452.3 million metric tons, a degrowth of 3.2% year-on-year. Bulk sales stood at ₹57.7 crore, compared to ₹35.5 crore in the same period last year. The Orgafeed business witnessed a revenue growth of 29.4% and an EBITDA growth of 84.4%, with EBITDA margins at 17.6%. The company’s board approved the acquisition of 100% stake in HR Food Processing Private Limited, operating under the brand OSAM, and is on track with its greenfield expansion of ₹280 crore in Maharashtra.
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Segmental Performance
In India, liquid milk sales grew by 2.9% in volume and 6% in revenue, with sales of 10.27 lakh litrs per day. Procurement in India was 16.75 lakh litres per day, compared to 15.96 lakh liters per day last year. In Africa, milk volume was around 1.6 lakh liters per day, a 19% growth, with a value of ₹81 crore, a 26% growth. Procurement in Africa was 1.98 lakh liters per day.
Inventory Management
The company has significantly reduced its inventory of butter and skimmed milk powder (SMP). As of now, the butter inventory is valued at ₹9.7 crore, compared to ₹155 crore in June 2024. The SMP inventory is valued at ₹17 crore, compared to ₹144 crore last year. The company sold SMP at a market price lesser than its carrying value, incurring a loss of approximately ₹1.2 crore in June.
Africa Business
The Africa business saw a healthy revenue growth of 26.9% year-on-year, with an EBITDA margin of 13%. The primary reason for the faster revenue growth and lower EBITDA margin is the start of a new Kenya plant focused on capturing the mid-market at a strategic pricing. The company also witnessed an increase in procurement prices compared to Q1 FY25 in both Kenya and Uganda. The company expects gradual improvement in the profitability of its Africa business as it gains market share.
Orgafeed Business
The Orgafeed business continues to perform exceptionally well, with a revenue growth of 29.4% and an EBITDA growth of 84.4%. The EBITDA margins now stand at 17.6%. The company sees a lot of potential for scaling up this business as it is only catering to 35% to 40% of its farmers. The company expects this number to rise further going ahead.
Strategic Initiatives
Dodla Dairy is strategically expanding its capacity and footprint. The board recently approved the acquisition of 100% stake in HR Food Processing Private Limited, which operates on the premium brand OSAM and has a strong presence in Bihar and Jharkhand. The company’s greenfield expansion of ₹280 crore in Maharashtra is on track, with daily procurement in the region already reaching around 2.6 lakh litres per day.
Outlook
The company expects the trend of lower procurement prices to improve in Q2 FY26 as the full impact of lower procurement prices will be reflected in the current quarter. The company aims to deliver accelerated growth while maintaining a healthy profitability across the business. The company anticipates a volume growth of 7% to 8% and a value growth of 12% to 13%.
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