The company’s managing director, Dodla Sunil Reddy, attributed the performance to several influencing factors. In Indian operations, a shorter summer season led to lower sales of summer-related Value Added Products (VAP) such as curd, lassi, and ice cream. These higher-margin products typically contribute significantly during warmer months. This highlights the seasonal sensitivity and product mix challenges faced by dairy manufacturers in regional markets.

On the African business front, specifically in Kenya, revenue increased, but margins came under pressure. This margin compression was a strategic consequence of the company’s focus on capturing higher market share with the operationalization of a new plant in the region. The emphasis on aggressive pricing to expand market presence, combined with potentially higher procurement costs in Africa compared to the previous year, impacted overall profitability. This illustrates the complexities of international dairy market expansion.

Operational performance notably weakened during the quarter, with Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) declining by 21.5% to ₹82.5 crore from ₹105.1 crore year-on-year. Consequently, the EBITDA margin contracted significantly to 8.2% from 11.5% in Q1 FY25, indicating increased operational costs or pricing pressures. Raw material costs, at ₹710.61 crore, were a substantial expense, alongside changes in inventory, employee benefits, and other operating expenses.