01 — At a Glance
The Milk Supplier That Lost Money When Milk Got Expensive
- 52-Week High / Low₹1,525 / ₹955
- FY25 Revenue (Full Year)₹3,720 Cr
- FY25 PAT (Full Year)₹260 Cr
- Full-Year FY25 EPS₹43.09
- Annualised EPS (Q3×4)₹45.56
- Book Value₹254
- Price to Book3.89x
- Dividend Yield0.51%
- Debt / Equity0.04x
- Q3 FY26 3-month Return-21.0%
Auditor’s Opening Note: Dodla Dairy closed Q3 FY26 with ₹1,025 crore revenue (+13.7% YoY), ₹74.4 crore PAT, and a 6.7% PAT margin—compressed from 7.1% last year because milk procurement costs spiked 12% while customer demand went into hibernation mode. Winter happened. Dairy margins got destroyed. The stock returned -21% in three months because apparently, a company doubling profits over five years doesn’t deserve any credit when one quarter disappoints. Welcome to dairy stock ownership.
02 — Introduction
Milk Delivery With The Vibes Of A Weather Forecasting Company
Dodla Dairy. Incorporated 1995. South Indian darling. Procures milk from 1.4 lakh farmers. Sells branded packaged milk through 645 retail parlours and 2,750+ distribution agents. Has 16 processing plants, 150+ milk chilling centres, and expansion plans in Maharashtra and Uganda.
And right now, it’s in the middle of what management calls “a unique weather anomaly.” Translation: it’s so cold in India that dairy cows apparently consider milk production a luxury, not a necessity. Procurement volumes up 7.5% to 18.3 lakh litres per day (LLPD), but costs up 12% because farmers aren’t discounting their milk just because you’re wearing a jacket to work.
Revenue grew 13.7% YoY. Profits grew 17.1%. On paper, this looks fantastic. Until you realise most of that growth came from a one-time tax reversal of ₹22 crore from an ITAT ruling in the concall. Strip that out, and PAT growth is… well, it’s there, but not the hero’s journey management wants to sell.
The real story? Milk prices went up. Demand went down. Bulk commodity sales (which were ₹72 crore last year) essentially vanished to ₹0.1 crore. Management’s solution: wait for summer. When it’s hot, people drink more milk. When it’s hot, you can raise prices. Until then, margins compress and shareholders bite their nails.
From the Jan 2026 Concall: “We did not pass on the entire increase in cost to the customers due to subdued demand during the winter season.” Translation: we could’ve raised prices. We chose not to. Now we’re bleeding margins while smiling at investors.
03 — Business Model: WTF Do They Even Do?
Procure Milk From Villagers. Package It. Sell It. Pray For Summer.
The business is simple: Dodla sources raw milk from farmers in 5 states (Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra), processes it at 16 plants, and distributes through branded outlets. Main revenue driver: liquid milk (~60–65% of portfolio). Growing driver: value-added products—curd, paneer, ghee, ice cream, lassi—now at 35% of revenues, up from 28% in FY24.
The model has three income streams: (1) Liquid milk sales under Dodla brand, (2) VAP revenue from high-margin products like paneer and ghee, (3) Bulk commodity sales (SMP and butter) for which management is currently taking a strategic pause because the margins are terrible and supply is tight.
Geographic expansion: Africa (Kenya and Uganda) contributes 9% of revenue and is growing at 35%+ YoY. Latest move: acquiring OSAM (HR Food Processing) in Odisha for ₹271 crore to enter Eastern India dairy market. New plant in Maharashtra (280-crore capex) targeting commercial operations by Sept 2026 to add ₹500–600 crore incremental revenue in year one.
Liquid Milk %~62%Core business
VAP %35%Growing faster
Milk Procurement18.3 LLPDQ3 FY26
Curd Sales355 TPD+15.5% YoY
Procurement Model: Dodla procures 98% directly from farmers through 7,900+ village-level collection centres. This gives massive supply security but also price exposure—when procurement costs spike 12% in winter, there’s nowhere to hide. The company pays farmers ₹39.8/L in Q3, sells to consumers at ₹57.7/L. The margin? Getting squeezed. The response? “We will pass it through in summer.”
💬 Have you ever wondered why your milk doubles in price when summer hits? Dodla’s financials just answered it. Do you think that’s fair pricing or just weather-driven greed?
04 — Financials Overview
Q3 FY26: The Numbers That Scream Margin Pressure
