Highest ever Milk Procurement volume of 21.1 LLPD, up 13.0% YoY.
Milk Sales volume stood at 13.6 LLPD, an increase of 14.5% YoY.
Curd sales volume reported solid growth of 41.4% and stood at highest ever volumes of 642.6 MTPD.
Key drivers: Extended summer boosted sales of high-margin summer VAPs like ice cream, buttermilk, lassi; inclusion of OSAM business volumes; strategic pricing in Africa.
Segment-wise Performance
India Dairy Business: Performance impacted by pricing pressure; milk procurement prices rose faster than realization prices, keeping gross margins under pressure.
OSAM Business: Disciplined improvement in operational efficiency led to better Q1FY27 operating margins compared to full year FY26, though higher procurement prices pressured gross margins.
Africa Business: Delivered strong revenue growth of 45.6% YoY, driven by robust milk sales growth of 52.3% YoY; achieved highest ever EBITDA of ₹24.2 Cr.
Orgafeed Business: Recorded strong revenue growth of 25.9% YoY; EBITDA margin stood at 10.5%; raw material price grew faster than selling price, leading to margin compression, but marked a recovery from the previous quarter.
YoY comparison: Revenue up 19.0%, EBITDA down -21.3%, PAT down -35.4%
QoQ comparison: Revenue up 11.5%, EBITDA up 20.6%, PAT down -41.7%
Drivers of financial performance: Higher revenue growth offset by lower gross profit margins due to elevated milk procurement costs and increased packing material costs (up 48%); increase in employee costs pertaining to new labour laws; increased transport, overhead & fuel costs due to product mix shift.
Key Risks: Raw material (milk) price hikes, geopolitical tensions affecting packing material costs, pricing pressure in the standalone business.
Geographical Revenue Split
Domestic vs Export/Regional Revenue: Not Specified in precise terms for Q1 FY27.
Regional Breakdown: Operations and revenue contributions from India (including newly acquired OSAM in East India) and Africa (Kenya & Uganda).
Balance Sheet Snapshot
The company continues to have a net debt free status (Net Cash position) as of 31st March 2026.
Financial Health Insights: Healthy ROCE of 16.0% (FY26); steady expansion of capabilities and capacities reflected in growth of current assets from FY22-FY26.
Capex & Cash Flow Health
Capital Expenditure: Total Capex Plan from FY26 to FY28 is Rs. 590.0 Cr+. Capex Done in FY26 was Rs. 350.0 Cr+.
Investment Rationale: Focus on capacity increase (~15 LLPD addition), expanding geographic footprint to deepen market presence and widen distribution reach, and increasing VAP mix to enhance margins and diversify the portfolio.
Strategic & R&D Initiatives
Investments in Innovation: Greenfield expansion in Maharashtra (₹280 Cr, 10 LLPD capacity, commercial ops by end-FY27); Greenfield expansion in Uganda (₹60 Cr, ~2 LLPD capacity, execution by end-FY29); Acquired OSAM Dairy in East India (₹247.2 Cr, ~2.2 LLPD capacity).
Expected impact on growth: Expansion aims to strengthen procurement network, enter new markets (e.g., Maharashtra, deeper East India), and expand VAP portfolio.
Strategic Rationale: Expanding into high-growth markets, reducing operational costs through synergies, and diversifying the product portfolio for margin enhancement.
Industry Trends & Business Environment
Macro/Industry Trends: Extended summer boosted demand for summer VAP products; revival in milk supply but prices remain elevated; industry-wide trend of high procurement prices.
Impact on Company: Elevated input costs compressed gross margins; strong demand for summer VAPs boosted sales volumes in that category.
Management Commentary & Growth Outlook
Strategic Outlook: "We are progressing well towards our expansion plan focused on capacity increase, expanding our geographic footprint to deepen market presence and widen distribution reach, and increasing our VAP mix to enhance margins as well as diversify the product portfolio." - Mr. Dodla Sunil Reddy, Managing Director.
FY Guidance: Not explicitly provided for FY27.
Risks and Opportunities: Risks include pricing pressure and high input costs. Opportunities include expansion into new regions (Maharashtra, East India via OSAM, Africa) and growth of the high-margin VAP portfolio.
ESG Updates
Resource Conservation: Reduced water usage in milk processing from 1.07 to 1.06 litres (standalone).
Renewable Energy: Installing solar panels and boilers across operations.
Learning and Development: Regular training focused on quality, productivity, EHS, and other sustainability areas.
