Dodla Dairy: FY26 Guidance Revision & Strategic Update

Executive Summary Dodla Dairy has revised its FY26 revenue growth guidance to 10–12% (down from the previous 15% estimate). The revision is attributed to a challenging H1, where early monsoons dampened summer demand for high-margin products like curd and lassi. Despite the topline moderation, the management maintains a positive outlook on profitability, projecting sustainable EBITDA margins of 8–9%. Revenue & Margins: Guidance: FY26 revenue is projected to cross ₹4,000 crore. Q2 Performance: Reported revenue of ₹1,019 crore with a PAT of ₹65.60 crore. The EBITDA margin stood at 9.10%, supported by stable procurement trends. Margin Outlook: Management expects margins to stabilize in the 8–9% range, contingent on the normalization of milk supply during the flush season. Segment Performance: Value-Added Products (VAP): Contribution to the sales mix declined to 33% (vs. 37% in H1FY25). Management clarified this was due to a strategic reduction in bulk inventory sales (skimmed milk powder/butter) rather than a drop in consumer demand. Animal Feed (Orgafeed): A high-growth vertical reporting ₹83 crore in H1 revenue. The segment is effectively scaling with 60% capacity utilization and is projected to grow 25–30% in FY26 with stable margins. International Business: Operations in Kenya and Uganda contribute ~11% to total revenue. Kenya is witnessing significant volume expansion with margins slightly superior to domestic operations. Strategic Developments & Capex Inorganic Growth: The acquisition of Osam Dairy (Eastern India) is expected to contribute approximately ₹100 crore to the topline in FY26 (consolidated for 8 months). This inorganic growth is incremental to the 10-12% organic guidance. Maharashtra Expansion: A new facility is scheduled for commercial production by March 2027. The strategic intent is primarily procurement-focused to leverage high milk availability in the region, despite competitive intensity.