Dodla Dairy stock jumps 16% on stellar Q1 earnings, logs biggest intraday gain in 6 months

Shares of Dodla Dairy, one of India’s leading integrated dairy companies, spiked 16% in today's intraday trade to hit a fresh all-time high of ₹1,346 apiece after investors reacted positively to the company's Q1FY25 earnings. Today's gain was the stock's largest intraday increase in the past six months, propelling it to nearly a 200% rise over the past five years.

The company recorded growth both in top line and bottom line, with the highest-ever quarterly operating revenues at ₹911.6 crore, up by 10.7% YoY. The company also recorded the highest-ever quarterly sales for both value-added products (VAP) and international business during the quarter. 

Its value-added product sales reached ₹313.9 crore, up by 21.4% YoY. VAP now contributes 35.4% to the top line, according to the company's earnings report. 

Its domestic business grew by 8.5% YoY to ₹827.9 crore, whereas the international business saw robust 38% growth, registering revenues of ₹83.6 crore in Q1 FY25.

During the quarter, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) crossed the ₹100 crore mark for the first time in the company’s history, reaching ₹105.1 crore, led by margin expansion at the gross level due to optimum procurement and a better product mix.

The EBITDA margin expanded by 420 bps YoY to 11.5% in Q1 FY25. Profit after tax grew by 85.9% YoY to ₹65 crore in Q1 FY25. PAT margin stood at 7.1% vs. 4.2% in Q1 FY24.

Dodla Dairy procures, processes, and sells milk and milk products. The company’s product portfolio includes milk, buttermilk, ghee, curd, paneer, flavored milk, doodh peda, lassi, ice cream, and milk-based sweets.

The company's procurement is centered in five states, and its products are available for purchase in 13 states. Dodla Dairy has 152 milk chilling centers and plants. Its average milk procurement during Q1 FY25 increased by 10.9% YoY to 17.6 LLPD.

The Indian dairy industry stands as one of the largest and most diverse sectors globally, significantly impacting the country's economy and the livelihood of millions of farmers.

India produced an impressive 230.58 million tonnes of milk during the fiscal year 2022–23, securing its position as the world's leading milk producer. According to the Food and Agriculture Organization (FAO), India ranks first globally in terms of total milk production.

Milk production in India increased by 3.83% in 2022–23 compared to the previous year, 2021–22. This growth underscores the effectiveness of ongoing initiatives and improvements in the dairy sector.

Recent estimates show that Uttar Pradesh leads with 15.72% of the total milk production, followed by Rajasthan with 14.44%, Madhya Pradesh with 8.73%, Gujarat with 7.49%, and Andhra Pradesh with 6.70%. Collectively, these states contribute 53.08% of the total milk production in the country.

Emphasis on Value-Added Products

Dodla Dairy is making substantial investments to expand its range of value-added products, a strategy expected to enhance its margins. The company has been significantly investing in products such as curd, ice creams, flavored milk, lassi, buttermilk, and yogurt.

Following the COVID-19 pandemic, structural changes in consumer behavior have emerged due to increased hygiene awareness, which benefits the organised dairy industry.

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