Dodla Dairy Limited — Investor Meet, 05-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Dodla Dairy reported a 21% year-over-year increase in revenue for Q3 FY25, totaling INR 901 crores. The gross margin stood at 28.2%, consistent with full-year expectations. EBITDA reached INR 96 crores, with a margin of 10.6%. Net profit saw a significant surge to INR 64 crores, translating to a net profit margin of 7.1%, reflecting a 152 basis points improvement from the previous year. Volume growth was particularly noteworthy across India, Africa, and Ografeed segments.

**Future Outlook and Growth Drivers:** Management anticipates sustained revenue growth, driven by a combination of product portfolio expansion and geographic reach. Notably, a Greenfield facility with a capacity of 1 million liters per day is set to commence operations by FY27, funded through a mix of debt and internal accruals. The company is strategically positioning itself to curb seasonal sales fluctuations by entering new markets and enhancing its brand presence.

**Order Book and Operational Updates:** The dairy sector is expected to maintain robust performance despite seasonality. Management remains focused on quality milk procurement, leveraging a direct-to-farmer model to sustain milk quality and inventory levels through lean seasons.

**Analyst Q&A Insights:** Analysts queried management on aspects of revenue growth, profitability, and competitive landscape. Notably, management confirmed that higher procurement costs would likely lead to selling price adjustments, although these would remain in line with industry trends. The company is confident about maintaining margin levels, even as it faces heightened costs in the African segment due to procurement challenges.

**Market or Regulatory Updates:** The dairy industry is experiencing price adjustments amidst rising milk procurement costs. Analysts noted a potential impact from competitors adjusting prices, but management indicated they would respond strategically to maintain their market position.

**Strategic Focus Areas:** Current strategic themes include enhancing operational efficiency, expanding in high-potential regions like Maharashtra, and focusing on value-added product sales, which are expected to improve in the summer season. Management's optimistic tone indicates confidence in adapting to market dynamics while continuing to build brand equity.

**Investor Insight:** Overall, Dodla Dairy’s solid revenue growth, strategic expansion initiatives, and stable margin profiles suggest a positive trajectory. Given the company's proactive measures to navigate market fluctuations and its ambition for future growth, it's prudent to consider a ‘buy’ position, noting potential durability against supply chain challenges and market competition.