DODLA - Dodla Dairy Limited Share Price

In the Q4 FY25 earnings call, management provided a positive outlook for Dodla Dairy Limited, emphasizing continued growth and strategic expansion plans. For FY25, the company achieved significant milestones, reporting a revenue increase of 19% year-over-year, totaling Rs. 3,720 crores, with a PAT of Rs. 260 crores, marking a 55.9% growth from the previous year.

Key forward-looking points include the completion of a greenfield project in Maharashtra with a total outlay of Rs. 280 crores, expected to enhance processing capacity by 10 lakh liters per day by FY27. The company is transitioning from being a net buyer to a net seller of skimmed milk powder (SMP) and butter, supported by improved procurement strength and operational efficiencies.

Management conveyed expectations for continued growth, targeting a procurement increase of 15%, pushing average procurement to 18 lakh liters per day in FY26. They reported a stable margin performance through Q4 with revenues rising by 15.5% year-over-year, bringing quarterly revenue to Rs. 910 crores. This includes a strategic price hike of Rs. 1.19 per liter of milk to align with rising procurement costs, while value-added products (VAP) contributed 32% of total revenues.

In the international segment, the dairy businesses in Kenya and Uganda experienced a remarkable 71% growth, surpassing Rs. 100 crores for the first time. The company plans to further penetrate both domestic and African markets, with aspirations for new product launches and geographic expansion into northern India.

Overall, the management is optimistic about maintaining double-digit growth momentum in revenue and profitability in the upcoming financial periods, driven by strategic initiatives and market expansion efforts.

1. Question: "Sir, two questions. Firstly, the capacity utilization you mentioned was below 50%, so can you please tell me in the next two years how much of utilization will be reached? And secondly, Africa business utilization also."

Answer: The 50% capacity utilization was specifically for Orgafeed due to the new plant designed to process 10,000 tonnes monthly. We are targeting around 70% to 75% utilization in milk operations. This reflects our commitment to managing seasonal fluctuations through strategic procurement, ensuring efficiency across plants as we grow.

2. Question: "How do you see the milk prices panning out in the next, let's say, one year?"

Answer: With the early monsoon, we've started witnessing a softening of milk prices. We expect to reduce procurement prices, having already initiated a price reduction. This helps us stabilize costs while continuing to respond to market demands, ensuring we maintain our competitive edge.

3. Question: "What would be our total fat product sales for FY'25?"

Answer: For FY'25, we sold approximately Rs. 202 crores of butter, Rs. 110 crores of SMP, and Rs. 80 crores of ghee, totaling around Rs. 392 crores. This marks a substantial increase from FY'24, where our sales included minimal butter and SMP, focusing largely on ghee.

4. Question: "What is the expectation for procurement volume growth over the next two years?"

Answer: We projected a growth rate for procurement volumes of around 15% for FY '25-'26, targeting an average procurement of 18 lakh liters daily in India. Our approach focuses on internal growth while ensuring quality and pricing in our supply chain, notwithstanding the upcoming Maharashtra expansion.

5. Question: "What is the current price differential between us and the cooperatives?"

Answer: The price differential is maintained, with our prices around Rs. 7 to Rs. 8 higher than cooperatives in certain regions like Tamil Nadu and Karnataka. This gap signals our market positioning despite competitor price adjustments, and we aim to keep it steady moving forward.

6. Question: "What was the curd sales amount in rupee terms this quarter?"

Answer: For Q4, our curd sales reached Rs. 193 crores. This indicates steady demand in our value-added products, contributing to our overall revenue growth trajectory amidst competitive market conditions.

7. Question: "What are your plans for geographic or distribution expansion that will support the growth outlook?"

Answer: We are actively exploring deeper penetration into existing markets, particularly in states like Tamil Nadu and Maharashtra. Additionally, we plan to target northern regions to expand our footprint, enhancing brand visibility while leveraging our product offerings for sustained growth.

These summaries encapsulate key queries and their respective answers from the earnings call, adhering to character limitations and maintaining essential details provided.