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    Dodla Dairy

    DODLA
    Fast Moving Consumer Goods·18 May 2026
    Management Summary

    Dodla Dairy delivered record revenues in Q4 FY26 and full year FY26, showcasing resilient performance amidst challenging industry conditions marked by high milk procurement costs. While margins were compressed due to input inflation and a strategic decision to prioritize market share, the company saw strong growth in its Africa and OrgaFeed segments. Management anticipates a gradual margin recovery in FY27 as procurement costs normalize and pricing actions take effect, alongside continued strategic expansions.

    Highlights

    5

    • Q4 FY26 revenue reached a highest-ever ₹1,074 crores, reflecting an 18% year-on-year growth primarily driven by volume expansion.

    • Full year FY26 revenue also hit a record high of ₹4,125 crores, growing 10.9% year-on-year, demonstrating resilient performance despite industry challenges.

    • The Africa business recorded robust growth with ₹151 crores revenue in Q4, a 48% YoY increase, and achieved its highest-ever EBITDA of ₹18 crores for the quarter.

    • OrgaFeed business delivered a strong revenue growth of 23.2% year-on-year, complementing core dairy operations and strengthening farmer relationships.

    • Milk procurement levels remained stable at 18.5 lakh liters per day in Q4, an increase of 13.4% year-on-year, underscoring strong procurement network.

    Concerns

    4

    • Q4 FY26 EBITDA margin stood at 5% and PAT margin at 6.5%, with margins remaining under pressure due to elevated milk procurement costs and a calibrated pricing strategy.

    • Adjusted PAT for FY26 was approximately ₹215 crores (5.2% margin) after excluding one-off tax credits and interest income, indicating underlying margin pressure.

    • Packaging material costs have increased by 30%, adding to input cost inflation.

    • The overall VAP portfolio could not grow to its full potential due to operational variability, though future growth is targeted.

    Key financials

    Metrics

    7

    Periods

    2

    Q4 FY26

    3
    • Revenue
      ₹1,074 Cr
      YoY+18.1%
    • EBITDA Margin
      5%
    • PAT Margin
      6.5%

    FY26

    4
    • Revenue
      ₹4,125 Cr
      YoY+10.9%
    • EBITDA Margin
      7.5%
    • PAT Margin
      6.5%
    • Adjusted PAT
      ₹215 Cr

    Segment breakdown

    Africa Business
    ₹151 Cr Q4 FY26 Revenue48% Q4 FY26 Revenue Growth₹18 Cr Q4 FY26 EBITDA60% Q4 FY26 Liquid Milk Sales Growth
    OrgaFeed Business
    23.2% FY26 Revenue Growth11% Q4 FY26 Margins
    OSAM Business
    ₹81.9 Cr Q4 FY26 Revenue₹2.7 Cr Q4 FY26 EBITDA21% Q4 FY26 Gross Margins
    India Standalone
    6.5% Q4 FY26 EBITDA Margin58.4 Rs/liter Q4 FY26 Average Milk Sales Price41 Rs/liter Q4 FY26 Average Procurement Cost₹230 Cr Q4 FY26 Curd Sales19.1% Q4 FY26 Curd Sales Growth5.5% Q4 FY26 Liquid Milk Sales Volume Growth16.5% Q4 FY26 VAP Volume Growth
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹430 crores

    Debt

    Debt disclosed

    Dividend

    ₹5/share (final)

    Liquidity

    Cash ₹649 crores

    Includes cash, bank balance, and current/non-current investments, all liquid in nature.

    Guidance & targets

    9
    CategoryTargetPriority
    Revenue
    Revenue Growth
    low to mid-teens
    		Medium
    Profitability
    Gross Margin Recovery
    50 to 100 basis points
    		Medium
    Tax Rate
    Effective Tax Rate
    25 to 27%
    		High
    Product Mix
    VAP Contribution
    32% to 34%
    		High
    Africa Business
    Contribution to Consolidated Revenue
    15% to 18%
    		High
    Africa Business
    Sustainable Volume Growth
    20%
    		High
    Africa Business
    Sustainable Value Growth
    INR 600 crores
    		High
    OSAM Business
    Margin Convergence Timeline
    6 to 12 months
    		Medium
    Maharashtra Plant
    Procurement Target
    minimum 5 lakh liters per day
    		High

    What to watch in Q1 FY27

    5

    Milk Procurement Cost Normalization

    Next month or so / Q1 FY27
    CurrentINR 41 per liter (Q4 FY26 average)
    TargetReduction by ~INR 1 per liter

    Why it matters

    Directly impacts gross margins and overall profitability, a key driver for margin recovery.

    We're anticipating the procurement improves, we should get down another rupee or so will be coming down in the procurement price.

    Risks & concerns

    5
    RiskSeverity

    Input Cost Inflation (Milk Procurement)

    Milk supplies remained constrained for most of the year, and procurement cost inflation was sharp, leading to margin pressure. — Management acknowledged

    high

    Input Cost Inflation (Packaging & Fuel)

    Packaging material costs increased by 30%, and there is uncertainty regarding future fuel price movements, which could significantly impact freight costs. — Management acknowledged

    high

    Erratic Rainfall & Demand Impact

    Erratic rainfall affected demand for certain value-added products in some regions, and El Niño could impact milk yields. — Management acknowledged

    medium

    Market Share vs. Margin Trade-off

    The company did not fully pass on procurement cost increases to selling prices to maintain market share, resulting in margin compression. — Management acknowledged

    medium

    Global Price Uncertainty

    Uncertainty in global pricing of fuel, plastics, and agricultural commodities due to external factors like war and El Niño makes future cost projections difficult. — Management acknowledged

    high

    Q&A highlights

    8

    “I think it's more in terms of being cautious with this whole uncertain environment that we are in, because none of us are able to take sure of what is going to be pricing of fuel, pricing of plastics, the whole agriculture under impact with urea production none of this is very clear for us.”

    Management indicates a cautious stance on future margins due to macro uncertainties, suggesting current guidance is conservative.

    asked by Praveen Kumar

    3 min read6 chapters

    Detailed Narrative

    01

    Q4 FY26 and Full Year Performance Highlights

    Dodla Dairy reported its highest-ever quarterly revenue of ₹1,074 crores in Q4 FY26, marking an 18% year-on-year growth driven by volume expansion. For the full fiscal year, revenue reached a record ₹4,125 crores, up 10.9% YoY. Despite strong top-line growth, Q4 EBITDA margin was 5% and PAT margin 6.5%, impacted by elevated milk procurement costs and a strategic decision to not fully pass on price increases to maintain market share. Full year FY26 EBITDA margin stood at 7.5% and adjusted PAT margin at approximately 5.2%.

    02

    Africa Business: A Key Growth Engine

    The Africa business demonstrated robust performance, with Q4 FY26 revenue of ₹151 crores, a significant 48% YoY increase, primarily fueled by over 60% growth in liquid milk sales. This segment achieved its highest-ever EBITDA of ₹18 crores for the quarter, benefiting from increased scale and operational efficiencies. Management views Africa as a crucial long-term growth driver, targeting its contribution to consolidated revenue to reach 15-18% by FY28, supported by a Phase 2 expansion in Uganda.

    03

    OrgaFeed and OSAM Businesses Update

    The OrgaFeed business recorded a strong 23.2% year-on-year revenue growth for FY26, playing a strategic role in strengthening farmer relationships and the procurement network, despite a slight dip in margins due to higher raw material costs and distribution expansion. The OSAM business showed steady progress, with Q4 revenue of ₹81.9 crores and EBITDA of ₹2.7 crores. Management aims to improve OSAM's gross margins from the current 21% to 25% within the next 6 to 12 months through enhanced operational efficiencies.

    04

    Strategic Expansion Projects and Capex

    Dodla Dairy is actively pursuing several expansion initiatives. The Maharashtra project is on schedule to commence commercial operations by the end of FY27, with ₹106 crores of cumulative capex already deployed. The company has also secured a 7-acre land parcel for a new dairy project in Bihar, with ₹4.4 crores allocated for land. Additionally, a greenfield expansion in Uganda is budgeted at ₹60 crores, slated for completion by year-end 2029. Total capital expenditure for FY26 amounted to ₹430 crores, maintaining a low debt-to-equity ratio of 0.03.

    05

    Margin Outlook and Input Cost Dynamics

    Management anticipates a gradual recovery in gross margins by 50-100 basis points in FY27, driven by expected normalization of milk procurement costs and planned pricing actions. While milk procurement costs averaged ₹41 per liter in Q4, the company has already implemented some price hikes and expects further cost reductions. However, significant increases in packaging material (up 30%) and uncertainty surrounding fuel prices remain key concerns, with the company balancing cost pass-through with market share retention.

    06

    Product Mix and Sales Strategy in India

    Dodla Dairy achieved its highest-ever milk sales of 14 lakh liters per day, reflecting continuous efforts to expand geographic reach. The value-added products (VAP) segment, excluding bulk sales, grew 21% year-on-year, with curd sales increasing 19.1% YoY. The company aims to improve its VAP mix to 32-34% of total revenue, focusing on curd, paneer, and ice cream, and is working to reduce the seasonality of products like buttermilk and lassi to ensure more consistent demand throughout the year.

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