Dodla Dairy Limited Q3 FY26 Earnings Call Summary

Summary

Dodla Dairy Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026, 09:00 AM IST

Event Participants

Executives 3 Dodla Sunil Reddy (MD), BVK Reddy (CEO), Murali Mohan Raju (CFO)

Analysts 8 Abhishek Mathur, Aditya, Aniruddha Joshi, Ankit Shah, Deepak Lalwani, Praveen Kumar, Resha Mehta, Sanjay Manyal

Financials & KPIs

Geographic & Segment Commentary

• Domestic (India): Volumes grew 19.6% YoY in liquid milk to 13.9 lakh LPD. Performance was impacted by the absence of a “flush” season, leading to higher procurement costs that weren’t fully passed through. Strategic focus remains on integrating OSAM and scaling the Maharashtra greenfield project.
• Africa (Kenya & Uganda): Revenue grew 34.5% YoY to ₹133 crores with EBITDA of ₹17 crores. Uganda is a high-margin (15%+) niche market focused on yogurt, while Kenya provides larger volumes. Management is expanding into fresh pasteurized milk in Uganda to target the unorganized “loose milk” segment.
• Orgafeed (Cattle Feed): Revenue grew 16% YoY to ₹40 crores with margins at 11.6%. While volume growth was 24% for 9M FY26, margins faced temporary pressure as raw material price hikes were not passed to farmers to protect procurement relationships.

Company-Specific & Strategic Commentary

• Maharashtra Greenfield: Total capex of ₹280 crores planned, with ₹69 crores already spent. Civil work is underway, and the plant is expected to be operational by the end of FY27, targeting 5 lakh LPD procurement.
• OSAM Integration: Quarterly revenue reached ₹80 crores; however, EBITDA was low at ₹0.85 crores due to ongoing SAP implementation and infrastructure upgrades. VAP share at OSAM is currently only 13%, targeted to reach 20%+.
• Uganda Expansion: A new ₹50-60 crore greenfield project on 70 acres near Kampala is planned for completion by FY28. It will focus on pasteurized milk, yogurt, and mineral water to capture high-single-digit market share in East Africa.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Procurement Strategy (BVK Reddy)

• Question: Why is procurement growth flat ex-OSAM? (Praveen Kumar)
• Answer: There has been absolutely no “flush” season this year due to erratic rains. We added 51 procurement locations/CMCs recently to ensure self-sufficiency even if supply remains tight.

Africa Profitability (Dodla Sunil Reddy)

• Question: What is the rationale for the Uganda expansion? (Aditya)
• Answer: Existing capacity is 300km from Kampala and focused on UHT. The new plant is closer to the capital, targeting the massive “loose milk” market with pasteurized offerings and increasing yogurt capacity where we hold 40-50% market share.

Margin Recovery (Murali Mohan Raju)

• Question: How should we look at margins given the OSAM drag? (Deepak Lalwani)
• Answer: OSAM margins are currently low (1%) due to streamlining and headcount additions (+250 employees). We expect improvement as we scale revenue and introduce VAP to that region.

Key Takeaway

Dodla Dairy delivered a resilient Q3 FY26 with 13.75% revenue growth to ₹1,025 crores, despite a challenging environment where the traditional winter milk “flush” failed to materialize. Procurement costs rose to ₹39.8/liter, compressing gross margins to 26% as the company prioritized market share over immediate price pass-throughs. Strategically, the company is pivoting toward significant regional expansions, with the ₹280 crore Maharashtra plant and a new ₹60 crore Uganda facility set to drive long-term volumes. While the quarter’s PAT of ₹69 crores was bolstered by a ₹21.8 crore tax reversal, core operational margins remain under pressure until planned ₹2-3/liter price hikes are implemented in early FY27. Management maintains a positive outlook, expecting a demand surge in the upcoming El Niño summer to restore EBITDA margins to the 8-9% range.