Dodla Dairy's Q1 net profit declines 42 pc in FY27
New Delhi, July 25
Dodla Dairy Ltd on Saturday reported a consolidated net profit of Rs 40.64 crore for the quarter ended June 30, about a 42 per cent decline sequentially from Rs 69.8 crore in the previous quarter.
However, revenue rose 19 per cent to a record Rs 1,197.94 crore, but profitability declined due to elevated milk procurement prices and strategic inventory buildup for upcoming quarters, the company said in a regulatory filing.
Managing Director of Dodla Dairy, Dodla Sunil Reddy said the strategy of inventory buildup is in line with overall industry trends, adding that the firm expects prices to start normalising Q2 onwards.
"With extended summers, our VAP portfolio, including curd, buttermilk, lassi, and ice cream, delivered record sales, reaching about a third of our total sales," he said.
The company recorded EBITDA of Rs 64.9 crore during the quarter up from 53.8 crore in previous quarter.
The uptick in expenses also impacted profitability of the business. Employee cost surged over minimum wages criteria for off-roll employees as per new labour laws.
Employee expenses rose 7.7 per cent from 51.7 crore to 55.7 crore on a sequential basis and surged 18 per cent on an annual basis.
The company said that it saw the highest ever milk procurement volume of 21.1 LLPD with 13 per cent YoY growth.
"Disciplined improvement in the operational efficiency in this vertical leads to better Q1FY27 operating margins as compared to full year FY26," the filing said.
Africa business delivered strong revenue growth of 45.6 per cent YoY, largely driven by a robust milk sales growth of 52.3 per cent YoY.
Further, the Board of Directors approved a primary investment of approximately Rs 11.6 crore for a 2 per cent stake in Sids Farm, a D2C dairy brand.
— IANS
Reader Comments
I am a small investor in Dodla Dairy and seeing net profit drop from Rs 69.8 crore to Rs 40.64 crore is a bit scary. But the company says it's due to inventory buildup and higher milk procurement costs — same story across the industry. At least their value-added products (curd, buttermilk, ice cream) sold well during summer. Let's hold on and see Q2 results.
I appreciate that Dodla Dairy is transparent about the expenses rising due to new labour laws for off-roll employees. That's the right thing to do — paying workers fairly should be priority. Profit can wait if it means better conditions for people. Also, their Africa business growing 45% YoY is impressive! 👏
Dairy sector is facing margin pressure everywhere, so this is not unique to Dodla. But their record milk procurement of 21.1 LLPD with 13% YoY growth shows they are getting supply right. The real test will be when prices normalise from Q2 — if they can maintain operational efficiency, stock will bounce back. For now, not selling.
Rs 11.6 crore for 2% stake in Sids Farm — interesting move into D2C. Dodla is traditionally a B2B dairy, so this could be a smart diversification. But I wish they'd focus more on controlling operational costs at home first. Employee costs up 18% year-on-year is significant. Let's hope the expansion pays off. 😅
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