Dodla Dairy Limited – Investor Presentation Summary

Key Operational Highlights

  • Highest ever Milk Procurement volume of 21.3 LLPD up 9.3% YoY
  • Milk Sales volume stood at 14.2 LLPD, an increase of 8.4% YoY
  • Curd sales volume grew by 23.0% and stood at 444.7 MTPD
  • Value-Added Products sales stood at ₹327.0 crore (27.3% of total sales)
  • Africa business milk sales increased by 68.5% YoY
  • Orgafeed business recorded revenue growth of 39.9% YoY

Key drivers of operational performance: Price increase of ₹2.5 per litre implemented during Q2 FY27, strong procurement network covering 8,700+ villages, expanded geographic footprint through OSAM acquisition.

Segment-wise Performance

  • India Dairy Business: Revenue growth driven by volume increase and price revision, though gross margins under pressure from higher procurement costs
  • OSAM Business: Healthy revenue driven by milk volumes, but VAP contribution remained low due to seasonal factors
  • Africa Business: Revenue growth of 55.9% YoY, EBITDA of ₹18.9 crore for the quarter
  • Orgafeed Business: Revenue growth of 39.9% YoY, EBITDA margin stood at 5.9%

Explanation of significant changes in segment performance: Africa growth driven by strategic pricing initiatives in Kenya, OSAM performance affected by seasonal factors, Orgafeed facing margin compression from raw material costs growing faster than selling prices.

Financial Highlights

Revenue: ₹1,196.0 crore (Q2 FY27)

EBITDA: ₹64.1 crore

PAT: ₹36.6 crore

EPS: ₹6.1

Margins: Gross Profit margin 23.1%, EBITDA margin 5.4%, PAT margin 3.1%

YoY/QoQ comparison: Revenue up 17.4% YoY but down 0.2% QoQ; PAT down 44.3% YoY and 10.0% QoQ

Drivers of financial performance: Higher revenue growth offset by milk procurement costs increasing 15.7% YoY versus selling price increase of 8.0% YoY

Key Risks: Elevated raw material costs, inflationary cost environment, packing material costs increased by 41.6% YoY

Geographical Revenue Split

Domestic vs Export/Regional Revenue: Not explicitly specified in presentation

Regional Breakdown: Operations across India (Southern and Eastern regions) and Africa (Kenya and Uganda)

Balance Sheet Snapshot

Net Debt/Equity: Net cash position (net debt free status)

Reserves: ₹1,661.3 crore (Other Equity)

Current Assets/Liabilities: Current Assets ₹860.5 crore, Current Liabilities ₹355.1 crore

Working Capital/Leverage Metrics: Healthy liquidity position with cash balance of ₹151.8 crore and bank balances of ₹139.8 crore

Financial Health Insights: Strong balance sheet with total equity of ₹1,721.6 crore, net cash position maintained

Capex & Cash Flow Health

Capital Expenditure: Total Capex Plan FY26 to FY28 of ₹670.0 crore+, Capex Spent as on September 2026 ₹395.0 crore+

Free Cash Flow: Not explicitly specified

Operating Cash Flow: Net Cash from Operating Activities ₹86.7 crore (H1FY27)

Net Debt Movement: Company maintains net debt free status

Investment Rationale: Expand aggregated installed capacity by ~15 LLPD, increase VAP mix to enhance margins, expand geographic footprint

Strategic & R&D Initiatives

Investments in Innovation: Maharashtra greenfield expansion (₹320 crore, 10 LLPD capacity), Uganda expansion (₹100 crore, 2 LLPD capacity), value-added product portfolio expansion

Expected impact on growth: Maharashtra project expected commercial operations by end-FY27, Uganda expansion execution timeline by end of FY29

Strategic Rationale: Deepen market presence in Maharashtra and Eastern India, widen distribution reach, diversify portfolio with high-margin VAP products

Industry Trends & Business Environment

Macro/Industry Trends: Milk availability remained healthy during quarter, festive demand shifted to Q3 FY27 from Q2 FY26, seasonal factors affecting summer product demand

Impact on Company: Procurement costs remained elevated to secure adequate inventory, packing material costs increased due to geopolitical tensions, product mix changes

Management Commentary & Growth Outlook

Strategic Outlook: "Dodla Dairy delivered a healthy performance in Q2 FY27, with revenue increasing by 17.4% YoY to ₹1,196.0 crore. This performance was driven by a combination of volume growth and improved realisation" - Mr. Dodla Sunil Reddy, Managing Director

FY Guidance: Expect festive season in Q3 to boost value-added products like ghee, sweets, flavoured milk; positive momentum witnessed in current month

Market Share Targets: Strategic pricing initiatives aimed at gaining market share in Kenya

Risks and Opportunities: Near-term focus on improving operational efficiency for margin expansion, leveraging OSAM's distribution network in Eastern India

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 sustainability areas

Digital Transformation

  • Transparency through Digitization: VLCCs equipped with GPRS enabled Electronic milk analyzers & Weigh scales
  • Digital testing: Raw milk tested digitally at 100% of collection centres and plants
  • Farmer payments: ~93% of total farmers payment covered through direct bank transfers