Shares of Parag Milk Foods slipped 12 per cent to Rs 65.5 and hit 52-week low, on the BSE in Friday’s trade after the company reported huge consolidated net loss of Rs 592 crore for the quarter ended March 2022 (Q4FY22), due to write down of inventory. The dairy products company had posted a loss of Rs 9.64 crore in a year ago quarter.

That said, the company’s consolidated revenue from operations grew 29 per cent to Rs 562 crore in Q4FY22 from Rs 434 crore in Q4FY21, driven by improvement in core categories. Further, the company said that the improvement in distribution coupled with buoyancy in overall demand aided performance.

For the financial year 2021-22 (FY22), Parag Milk Foods reported a loss of Rs 532.50 crore, due to one-time write down of Rs 509.50 crore.

Under brand “Gowardhan”, Parag Milk Foods offer traditional products like Ghee, Dahi, Paneer, etc. Under the brand name “Go” the company offers products like cheese, UHT milk, buttermilk, lassi, yoghurt etc.

“Since the company primarily produces perishable products which are governed and regulated by strict production and storage norms notified by Food Safety and Standards Authority of India (FSSAI), the company had to mandatorily write down its inventory to comply its guidelines and company policies. This is a one-time hit that the company has taken due to the Covid led uncertain situations that we faced,” the company said.

Moreover, as an additional precautionary measure, the samples had to be sent to appropriate authorities like National Accreditation Board for Testing and Calibration Laboratories (NABL) approved labs. The company also appointed an independent accounting firm to evaluate the quantity and value of the inventory.

“The sale of these value-added products produced from excess milk procurement, unfortunately, got disrupted due to frequent lockdowns that affected the continuity of business with HORECA and large institutions who curtailed their business for their strategic reasons. Not only the forecasted growth in the sales not materialize but it also resulted in non movement of stocks and built up perishable inventory in the supply chain,” the company added.

Besides that, the change in government policy with respect to infant food due to which the company could not supply the stock of ‘whey protein’ – the main ingredient in the infant food formula to end consumers.