South Indian dairy processor achieves record procurement of 21.3 LLPD and 17.4% revenue growth to ₹1,196 crore, while elevated milk costs compress profitability.
Leading South Indian integrated dairy processor Dodla Dairy Limited (NSE: DODLA) reported its unaudited consolidated financial results for the second quarter ended September 30, 2026 (Q2 FY27), showcasing resilient top-line expansion alongside notable margin compression. Operational revenue rose 17.4% year-over-year to ₹1,196.0 crore, compared to ₹1,018.8 crore in Q2 FY26. However, consolidated profit after tax (PAT) contracted 44.3% to ₹36.6 crore (down from ₹65.7 crore), as raw milk procurement costs escalated faster than retail price realisations across its domestic operating markets.
Operational volume metrics reached historic highs during the quarter. Dodla Dairy achieved its highest-ever average milk procurement volume of 21.3 lakh litres per day (LLPD), representing a 9.3% increase over the prior-year period. Daily liquid milk sales grew 8.4% year-over-year to 14.2 LLPD, supported by the integration of the acquired OSAM dairy business and ongoing market penetration across southern and central India. Managing Director Dodla Sunil Reddy highlighted that healthy procurement volumes reflected a sustained recovery in milk availability, though procurement payouts remained elevated as the company strategically secured raw milk inventory ahead of the high-demand festival season.
In the value-added products (VAP) portfolio, excluding bulk commodity sales, revenue reached ₹327.0 crore, contributing 27.3% to total turnover compared to ₹264.5 crore (26.0% of revenue) in Q2 FY26. Curd sales demonstrated exceptional momentum, with daily volumes expanding 23.0% year-over-year to reach 444.7 metric tons per day (MTPD). Conversely, demand for summer dairy categories—such as ice cream, flavored milk, buttermilk, and lassi—moderated sequentially due to seasonal monsoon patterns. Furthermore, the company recorded nil bulk commodity sales of skimmed milk powder (SMP) and butter during the quarter, compared to ₹28.3 crore in Q2 FY26, as inventory was retained to support fresh consumption channels.
From a margin and industrial cost structure perspective, gross profit margins contracted to 23.1% in Q2 FY27 from 27.7% in Q2 FY26, directly reflecting input price pressures. Consolidated EBITDA stood at ₹64.1 crore (down 30.9% year-over-year), with EBITDA margins declining from 9.1% to 5.4%. Beyond higher farmgate raw milk costs, the business absorbed a 41.6% increase in packaging material expenses, driven by geopolitical volatility impacting polymer supply chains, alongside higher overheads associated with freight and logistics. While Dodla implemented a retail price hike of ₹2.5 per litre to mitigate cost inflation, the adjustment occurred largely toward the end of the quarter, leaving margins temporarily compressed.
Internationally, Dodla Dairy’s African operations (headquartered in Kenya) delivered solid operational results, posting a 55.9% year-over-year revenue increase supported by a 68.5% surge in milk sales volumes, yielding a quarterly EBITDA of ₹18.9 crore. Concurrently, the animal feed division (Orgafeed) recorded 39.9% top-line growth, despite encountering raw ingredient cost inflation. Heading into the third quarter of FY27, management anticipates gross margin recovery as the festive consumption shift—which moved heavily into Q3 this fiscal year—drives high-margin dairy sweets, ghee, and value-added product volumes across organized retail channels.
Source: Kalkine Media / NSE Filings
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