Dodla Dairy Limited (DODLA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Dodla Dairy Limited Q1 FY27 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dodla Sunil Reddy, Managing Director, for his opening remarks. Thank you, and over to you, sir.

Thank you very much. Good morning to all the participants. On behalf of Burla Dairy Limited, I extend a very warm welcome to everyone joining us on our call today. On this call, I am joined by our CEO, our CFO, Mr. Mugli Mohan Raju, and SGA, our Investor Relations Advisors. I hope everyone had an opportunity to go through the financial results and invest a presentation, which has been uploaded on the stock exchanges and our company website. Q1 financial year 27 was marked by highest ever quarterly revenue of rupees 1,198 crores, a year-on-year increase of 19%, along with the record milk procurement of around 21.1 lakh liters per day, supported by the revival in the milk supply. EBITDA for the quarter stood at Rs. 65 crores, translating into an EBITDA margin of 5.4 percent, and PACs stood at Rs. 41 crores. While milk availability has improved during the quarter, procurement prices did not come down as the focus was on building up the inventory for future requirements. Our strategy is in line with the overall industry trends. These elevated procurement prices were not fully passed on to the consumer, resulting in continued near-term pressure on our profitability. With this in view, we will be able to pass on the increase in price to our consumers in the forthcoming waters. This said, the year-on-year decline in habitat and pack is largely cyclical driven by the input cost fees, and we expect gradual recovery from Q2 onwards. Our procurement network also continued to strengthen during the quarter. Procurement in Maharashtra and Karnataka improved, and we continue to add more farmers to our network. Coming to our value-added products portfolio, we recorded our highest-ever sales of Rs. 415 crores, a listing of 17.6% year-on-year growth, supported by prolonged summer seasons compared to the earlier onset of monsoons in Q1 FY26. We see a strong demand across our summer-oriented products such as curd, buttermilk, flavored milk, ice cream, and other value-added products. Notably, the highest-ever number is achieved without any support from bulk sales for S&P or butter, reflecting our continuous efforts and dedication of our team towards a WAP product mix aspiration. On a like-to-like basis, excluding the bulk sales proportion, WAP delivered a solid growth of 40.6% year-on-year. Africa Business delivered another strong quarter, recording the highest-ever revenues of 154 crores, representing a solid growth of 45.6% year-on-year. EBITDA also touched a record of Rs. 24 crores, increasing 74% year-on-year. We continue to maintain our market share of approximately 50% in Uganda, long-life milk category, and yogurt. In Kenya, our grossing capacity continues to ramp up towards full utilization, while our current market shares remain modest at around 2% to 3%. Our orga feed segment continues to complement our core dairy operations during the quarter. Beyond its financial contribution, this also plays an important strategic role in strengthening our procurement ecosystem and maintaining good relations with farmers. We continue to focus on improving operational efficiencies across sourcing and costs while strengthening Thank you. On land allotted by BIADA, we are revisiting our strategy for capital evapation either towards the land or towards more capacity at the Chandel facility. We aim to strengthen our presence in a more capital effective manner. I would like to inform you that the Board of Directors has approved a primary investment of rupees 11.65 crores for around 2% stake in Sidfarm Private Limited. SIDFARM is a premium dairy brand with a strong multi-regional direct-to-consumer and e-commerce presence. The investment aligns our core dairy business and provides exposure to the fast-growing premium and direct-to-consumer dairy segment. It also offers us an opportunity to associate with and support the growing for differentiated high-quality dairy brand. With this brief, I now hand it over to CEO of our company, Mr. B.B.K. Reddy. Thank you very much.

In the quarter, as I anticipated, the overall milk supply situation started improving, and we see some increase in our milk procurement volumes. Recorded at 21.1 lakh lakh litres per day, which is 13% year-on-year growth. It reflects the strength of our operational team, direct procurement model, and long-standing farmer relationship. The average procurement cost Q1 of FY27 stood Rs.41.3 per litre as evidenced Rs.41 per litre in the previous quarter, and 37.4 per litre in the Q1 of FY26. However, we continued with our approach of gradually passing on the price to the consumers and avoided taking a lump sum price hike. Our average meal sales price for the quarter stood at Rs. 59.4 per litre, which was 58.4 per litre in the previous quarter, and 57.2 To put this piece in context, the spread between our milk realization of Rs.59.4 and the procurement cost of Rs.21.3 narrowed Rs.18.1 per litre from Rs.19.8 per litre. A year ago, which largely explains the EBITDA margin decline from 8.2% to 5.4%. In addition to that, we witnessed some increase of our operational cost, mainly due to input cost inflation and shift in product mix from bulk sales to milk and wrap sales. We see an increase in cost like transportation, overheads, fuel, and packing. The packing material cost increased by 48% during the quarter, rising 5.6% of our revenue as against 4.4% in the period of last year. Today, we plan to pass on some part of this cost inflation to the end consumer in a gradual manner. Our pricing strategy remains in line with the overall industry trend and reflects a balanced approach. Our subsidiary, Osam Dairy, is also progressing well. We see a healthy contribution from the company in terms of our bird and web sales volume. With consistent and gradual improvement in operational efficiencies, OSAM is headed towards our targeted scale and margin profile. Coming to Africa business, it delivered a strong revenue growth of 45.6% on year-on-year, largely driven by a robust milk sales growth 52.3% on year-on-year. This is an outcome of our targeted efforts on gaining market share in Kenya by strategically pricing our products. Along with revenue growth, our profitability also improving steadily. We are confident in achieving robust and consistent revenue growth along with steady margin improvement in this business. So, coming to feed, RGA feed recorded revenue growth of 25.9% on year-on-year. Raw material price growth is still faster than the selling price, leading to continued pressure on the profitability. However, as anticipated, we see a sequential recovery in our profitability, our EBITDA margin for Q127 with marginal sequential improvements to 10.5%. Coming to product mix, our milk sales took 13.6 lakh litres per day, an increase of 14.5% on year-on-year. During the quarter, we delivered highest-table WAP sales number Rs.414.7 crores as against Rs.352.8 crores in FQ1-FI26. This was mainly due to a seasonal variation explained by our MD as well as improved contribution from our boss on business. CURD and CURD-based products reported healthy growth of 41.4% on year-on-year and stood at 642.6 million metric tons per day in terms of value. And CURD sales grew by 44.9% on year-on-year basis. Going ahead, we expect some modernization in the procurement cost from Q2 onwards, leading to start a gradual recovery in the margin profile for upcoming quarters. We are confident to mitigate this near-term pricing pressure and remain focused on effective execution and achieving our long-term objectives while delivering profitability growth. Now, I request Mr. Murali Mohan Rojie, our CFO, to highlight the financial quarters.

With a gross margin of 23.2% as again is 25.8% in Q1 FI 26. Employee expenses for Q1 FI 27 stood at 56 crores compared to 47 crores in the corresponding quarter last year. The 18% year-on-year increase was primarily due to awesome addition during this quarter and higher employee costs pertaining to the minimum wage criteria as per new labor laws. Other expenses for the quarter were 159 crore compared to 130 crore in the corresponding quarter last year. While other expenses remained broadly in line with revenue as a percentage of sale, the increase in absolute terms was primarily driven by higher transport, overhead, and fuel costs due to the shift in product mix from bulk sales to liquid milk and value-added products. EBITDA for La Quarta stood at 65 crores with an EBITDA margin of 5.4%. Depreciation expense increased to 23 crores in Q1-FI-27 from 18 crores in the corresponding quarter last year. Other income for the quarter stood at 14 crores. Unlike previous few quarters, we don't have any tax credits in Q1-FI-27 related to any of the favorable income tax orders. Thank you. We will now begin the question and answer session.

Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question comes from the line of

Praveen Kumar with Acuta's Capital Advisors. Please go ahead.

Yes, hello. Thanks for the opportunity. I had a couple of questions. The first one was on the margin trajectory. Can you walk us through how do you expect the margins to behave from a year onwards over the next six to nine months, and then also over the next two to three years? Can you walk us through what are the triggers, what are the near-term and the mid-term triggers for improving these margins? Or do you, given what has happened on the procurement side and on the pricing side, do you think that margins have structurally reset downwards to some extent? That is the first question. The second question was on the application path. I just want to understand the thought process behind that. Why that 2%? Why that very minor kind of mistake? What is the thought process behind it? Third question was on growth. If I look at the X...

I'm sorry to interrupt, Pravin. You're breaking up every now and then. Could you please change your location and use your phone on the handset mode in case if it's not on handset?

Yeah, it is on handset. Is it better now?

Yes, yes, it is good.

Yeah. So the third question was on the procurement growth for OSAM. That seems, on a worthwhile basis, that seems to have grown around 5.3%. So I just wanted to understand again that most of it has probably come from the Maharashtra scale-up. So does it mean that X of Maharashtra, the other geographies, there hasn't been much of a procurement growth? Yeah. Those are my three questions. Thank you. Yeah.

So thanks, Praveen. I'll answer the first two questions, and the third question regarding procurement growth in Osan and Maharashtra, BVK will answer. Margin trajectory, if you look at it, we are still confident that we will maintain between the 7% and 8% EBITDA margins, even in the current year that we are at, because like we were saying earlier, we were assuming that with the onset of monsoons, the procurement prices will taper down, But now, it's seeming to be that there's not much of an increase in procurement in terms of the flux that we normally expect. We will have to slowly pass on the prices to the consumers, which we have already started in the process. With that in view, the margins will start coming back to those, you know, between the 7% and 8%, subject to whatever is the one month of time that it consumes to pass on the prices. In the two to three-year scenario that we ask, we are confident of maintaining similar profit margins as we go forward, predominantly because of A, when we look at it, we are adding on Maharashtra, there is improvement expected from Osan. These are mostly seasonal corrections and not structural in nature. Therefore, we are very confident in the two to three years of the time. Therefore, it is not a reset of the margins, but more a seasonal correction that has been happening, that is the scenario. Now, coming to the capital locations to sit farm on a minor's day, it is basically for us more in terms of learning and keeping a closer watch on how the modern, high-value, the D2C products behave. Because, for example, we believe that for a consumption pattern to become a habit from a fad, it will take significantly long time. And therefore, the test of theses and such are the theses that we have, we normally try to go, we are learning it with another rather than trying to create on our own. And if it is showing good trajectory and possibility, we will also know beforehand as to how it is progressing. So that is the intention of the capital farm regarding procurement growth. BBK, sir, will explain why, what is happening in Bihar, and it's not only Maharashtra, but also I think they have grown in Karnataka as well. But DBK will explain Bihar's and other growth in particular.

Yeah, in some, you know, see, if you see last year, procurement last year, see, we don't have right data because they used to use a lot of powder and butter. Now, you know, that we are avoiding that powder and butter, and now, first quarter, you know, more or less, you know, we matched our sales to procurement. So, there is a slight growth, not much growth, because, you know, we have done a lot of corrections more than the procurement, you know. We are going for farmer, you know, payment model. That's why, you know, things are going very slow. But in Maharashtra, we have done a procurement growth. So, last year to this year, Maharashtra, we have done a growth of, overall growth, we have done 13%. We have done a growth of 10% in Maharashtra also. And then Africa, we have done roughly about 28% procurement growth, and only procurement growth. That's all from the procurement side. Right.

So, actually, my question on procurement was that if I take out OSAM, adjusted for OSAM, the remaining unit, procurement grew 5.3%, right? And when you are saying that Maharashtra grew around 10% and Africa grew 20 plus percent.

No, no. Maharashtra is a part of EDL overall, but overall we have grown by 13 and a half percent.

No, no. I understand that.

Some, almost it is flat, but you know, Africa and India together, we have grown more than 13%.

No, no, I understand that.

India, we have grown only 3%.

Yes, standalone only 3%, Praveen.

No, no, I understand that. I am saying that ex-OSAM, I mean, last year Q1, FY26 did not have OSAM, right? Then your procurement was around 18.7, correct? Around, right? And this year, if I take...

I'll tell you the break-up, Pravi. Just give a minute. So out of 18.71, the current year we have done 21.13. The break-up is for Dodd-Lad-I-D-India, 16.75, now increased to 17.23, that is 3% of growth. Then overseas from 1.96 to 2.52, that is 28.5% of growth. For HR goods, last year we don't have it, now we have 1.39 LPD. So the overall growth comes to 13%.

No, no, I understand that. I'm saying if from the 21.1, if I take out OSAM 14.39, around 19.7, correct?

Exactly.

Right? So that 19.7, I'm comparing it to the last year, 18.7. Right? Yes. That is a growth of 5.3%, which has more come from Maharashtra and Africa, looks like. Right? Most people from Africa, followed by Maharashtra. Yes, so hence my question was that does it mean that the other geographies like Karnataka, Andhra and others have they de-grown during this time in terms of procurement?

It's not de-grown, it's maintained the same because it's again the summer month of the growth.

Okay, and do you expect this kind of a trend to continue where you don't expect much of a growth from the existing geographies and largely Africa, Maharashtra and Bihar is what will drive?

So, basically, what happens is also what we play with pricing, because sometimes the pricing of the particular states in comparison with other states are lower or higher. We try to manage as a blend of all the states' procurement. For example, Andhra is becoming more competitive and the prices are going higher. There, we are not expanding capacities or improving and waiting to see if the pricing is going too high. And in certain areas where the pricing is more conducive to us because of our transport and being closer to the places where we operate, we enhance there. So, it's a blend of what we do also that plays into the role.

I understand. Thanks. Thanks for the response.

Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Anirudh Joshi with ICICI Securities. Please go ahead.

Yeah, thanks for the opportunity. And two questions. So can we largely assume that the worst in terms of margins is largely behind? And in a way, from here on, either there should be stability or there should be a recovery, depending on the milk procurant prices. Also, have we largely passed on the entire increase in procurement prices as well as fuel prices increased via failing price hikes or still we need to take some rounds of further price hikes? And then second question on the balance sheet, we have seen there is a drastic increase in goodwill and intangibles of almost 250 odd crores. So, I guess it's related to awesome acquisition. So, any plans for writing it off? And if it is written off, is there any tax benefit available on that? Yeah, thanks.

So, the first question, BBK will answer regarding our margin profile, what we had asked for, and I think the balance sheet, BBK, sorry, Mudli will answer it.

Yes, see, now, see, Africa, you know, we have done, you know, whatever procurement hike, you know, was there, you know, we compensated with the sales increase also. That is number one. And Argo also, what we have done, you know, slightly, you know, already 70-80 percent, you know, raw material price increase versus, you know, sales price correction, we have already done it. Only in Dobla DDL also, we waited till, you know, July 1st week, because normally, you know, from July onwards, you know, procurement goes up. Normally, prices, you know, will come down. So, this year, you know, it has not happened. That's why, you know, we have already done corrections, mostly from 15th onwards, and most of the corrections are done. We are very confident that, you know, we will get back to the same old last year, like, you know, 7 to 8 percent margin profile. Yes.

With regard to the tangible, so basically, like OSAM, we have 100 crores of goodwill is there. Apart from that, around 150 crores of branding is there. So based on that, we have allocation, impairment of whatever it is there. But it is a standard fair value of amortization. There is no any surprises of detection in the fair value.

Anrut. So, therefore, we will not be providing anything for write-offs in the impairment of assets, and like BDK was saying, we expect that the worst is behind us in terms of the procurement prices coming to a power of stability. I don't think they'll further increase dramatically. Marginal corrections might happen, but we will have to take it in the correction to the consumers.

Okay, sure, sir. This is very helpful. Just last question from my side. We have seen many players, especially in South India, are focusing very aggressively on ice cream segment and are setting up large plants also. So, considering the investments and the growth in ice cream segment, there is a possibility that there is a solid growth in the industry. So, what will you do that? It stands on, in a way, participating in the growth possibility for ice cream as an industry, and if, yes, what will be the capex or the investment plans on that? Yeah, that's it for my side. Many, many thanks.

Thank you, Amit. Right now, we don't have any plans of a major ice cream expansion as a capital expansion. We have also seen reasonably good traction in our ice cream volumes, which, thankfully, due to summer, have done very well for us. I think we still have some leftover capacities because we can also produce ice cream previously during the season to stock for selling at the peak summer season. So we are waiting to see how it pans out for us in the current year, and maybe such decisions will be made, not currently, but hopefully in the future. So, our growth has been from 16 crores to 22 crores in the first quarter itself. So, we think, you know, once we see this year panning out, and then we'll make plans. Currently, we do not have any plans for major expansion.

Thank you. The next question comes from the line of Darshita Shah with DSP Asset Managers. Please go ahead.

Yeah. Thank you for the opportunity. My first question was regarding the quantum of the price size. PVK, sir, mentioned we have done some corrections from July 15 to onwards. If you could just mention the quantum over the two rupees price equity took last quarter, how much incremental price equity have taken now?

So I think from the Q1 to Q1, if you compare the price increases, we have done an average price increase in Dodla of almost 2% increases in the consolidated, Dodla being around 1.4%, and Africa being around 4%. And I think currently we will look at another around 2%, 2.5% correction in the prices in the ongoing quarters that we look at. So, effectively, I think currently we should look at the 4-5%.

The 2.2% is in Sandloan, Dodla, or Africa and Dodla put together?

The total represents all put together. Dodla alone was around 1.4% currently, but we think we will take another 2-2.5% there.

But, Rasha, this is only milk regulation price we are talking about, not the blended.

Yes, yes, yes. Okay.

And the blended will be higher, because ghee and other products, we have taken a substantially larger price increase. This is only milk.

Got it. And secondly, on the volumes, how do you expect the volume growth to be for the year? First quarter, of course, we have done quite well, but how do you expect it to be for the full year, considering the price hikes that we are taking in?

We maintain our normal study, things of the 8-10% in India as volume growth, and the price hikes will add to the value growth, so that's what we look at.

Okay, so there is no change on the 8-10% volume growth number, despite the price hikes? Got it. Okay, great. That's all from my side. Thank you.

The next question comes from the line of Yash Goeka with Aurega Capital Advisors LLP. Please go ahead.

Hi, sir. I'm out of this.

Yes, Yash. Go ahead, please.

Hi. So, my question is on pricing. What are the price hikes taken by cooperatives in the region we are operating? And have you seen cooperatives taking price hikes in Tamil Nadu?

Thank you. And, sir, what is your price gap today with these cooperatives? Almost averaging because depending on product or whatever, I think between Tamil Nadu will be the highest with almost more than a 10 rupee price gap. And in Tarnataka, it might be 6-7 rupees price gap. So those are the only two areas where we have a significantly large price gap for the cooperatives.

Okay, and then our second question would be, what kind of price have you taken in the regions where your market share is stronger compared to the ones where your market share is bigger?

Basically, in terms of absolute number, it will be around a 2 rupee price increases that we have taken as a correction across.

Thank you. The next question comes from the line of Abhishek Mathur with systematic groups. Please go ahead.

Yes, sir. Thank you for the opportunity. Sir, you've mentioned in the presentation that you expect the 2Q milk procurement cost to normalize in the second quarter. What is leading you to sort of expect this? Is it only the improvement in the milk supply in Maharashtra or are there other drivers due to which you are seeing a normalization of milk procurement cost? Also, if you can help with what was the average procurement cost that you saw in the June month, and what is the procurement cost that you saw in the July month also? That's my first question.

So basically what we mean by normalization is whatever the price hikes that are taken will maintain the same. We won't see a decline in the procurement prices, what the normalization means. I think the specific numbers in terms of what the price of milk, they were almost the same in terms of June and July. I think if you want the specific number of prizes that we have received.

So, he says, basically, the average is around 41 rupees. Now, also, it is running around 41.20, more or less.

See, last two months, you know, in the month of May, June, July, you know, see, the overall procurement cost is standstill. So, it is, you know, in the same level. Only we have done the sales correction, average 2 rupees per litre milk, and that we have done 3 to 4 rupees correction.

Got it, sir. That's helpful. Secondly, just a bookkeeping question, if you can help with the numbers for the console overall realization for 1Q, the VAP console realization, and the standalone and Africa realizations, all for 1Q, please.

One minute, Murali will give you those numbers of 1Q for the realization that we have.

So, overall evaluation of the milk is basically per litre.

No, sir, overall console, including milk and wrap and everything.

Yeah, overall console is 62.78. Last year, current year it is 61.78, because the bulk was there in the last year. So, if I exclude the bulk, last year it is 59.82, current year it is 61.78.

And for VAP, sir, VAP console?

VAP console, it is basically excluding the FAT. It is 64.11 for the current year. Last year, 61.32. VAP product, 64.4 is current product. Last quarter, it is only 498.

Right. And FAT products? FAT products, FAT and FAT.

Yeah, only FAT and Ghee. And last year, sir, for standalone and for Africa, what are the realizations?

I will give you standalone. You see, Africa, you know, even Kenya and Uganda, average relation is 65 rupees. So, last quarter to this quarter, now, I will give a comparison. So, last year, if you see, you know, Uganda, we were at 59.36, and this quarter, you know, 65.31. And similarly, even in Kenya also, we were at 58, now we're now 65.

Got it, sir. And finally, for standalone.

Standalone, sir, overall excluding the bulk product is 59.99 to 61.36 for the India standalone. And overall, including sparse product, it is 59.90 to 62.88. I'm including the bulk. It is 63.24 of last April, 62.88 of current year.

Thank you. The next question comes from the line of Darshid Vora with Asset Meta Institutional Equities. Please go ahead. Yes, Darshid.

Yeah. Thank you for the opportunity and Congress and the strong growth in the revenues. My first question actually is that if we look at WAPs, say X of mulk and curd, then the growth has been somewhat lower when compared to historical growth rate that we've seen. So any particular reason for that?

Basically, for us, the other WAPs are considered to be much smaller. The major contribution does come from CURD. So even if you see CURD slightly increasing, it will be better. But I think I'll just check the numbers. But like ice cream and honey, we have done much better in terms of growth. Like 14 crores last quarter to 22 crores this quarter. I think the specific numbers in WAP minus CURD is what we'll explain.

So, in that means, we have grown 13.47. In the current product, we have grown by 41.43. And the other WAP products, 31.62. And the part and part products, which we reduced it, there is a degrowth of 46%. Okay, and the consumer. And apart from that, we have exited completely from the bulk sale, which was the negative. That is around 57 crores, which was there in the last quarter. We don't have done this.

So, if we incurred, when we say curd and curd products, it's not only curd that we talk there, but we talk of our buttermilk, lussie, and other fermented products, which also do well for us.

All right. All right. Good. Okay. And secondly, if you look at, so you've done increased procurement and you have mentioned that the procurement is not going to slow down from here onwards. So, do we see bulk sales coming back? And if yes, then what kind of a quantum are we looking at?

I think this year there won't be enough quantity of bulk sales. There will have to be net buyers of commodity if required, because this is supposedly the plus season where we should have seen a surge in volume growth of 20-25%, which is not happening and maintaining more of an even keel. With that, I think we don't have much of bulk sales available for this year.

All right. All right. All right. Great. Just final question. I just wanted the current sales in INR terms for the quarter.

So, sales and INA terms for India, including all the current products, will be

$333.96 for our current quarter.

All right. Last question is only $233.

Does that answer your question, Darshan?

Yes. Thank you so much.

The next question comes from the line of Resham Mehta with GreenEdge Wealth. Please go ahead.

Yes, sir. Thank you. So, would you like to... I mean, the first quarter console revenue growth has been, you know, very good, right? So, would you like to give some revenue guidance for the full financial year, console revenue growth?

We will again target the 10% of volume growth and 15% of revenue growth that we keep targeting. We might have minor corrections here and there, but consolidated, we will give the same guidance of 10% of volume and 15% by revenue.

Right. And can you talk about your standalone VAP growth in terms of revenues for the last financial year, FY26 versus FY25, and also for the current quarter, which is Q1 of FY27 versus Q1 of FY26?

So you want FY25 whole year comparison and the current quarter comparison, ma'am?

Yes, yes, correct.

Yeah, I think Woodley will give you that in terms of the whole year and the current quarter. Yeah, he'll start with the current quarter.

Current quarter, India, I'll talk about first. So, current quarter growth with regard to the value, it is around 4.9% in the milk and 34% in the current quarter.

I do want the WAP revenues, revenues, standalone WAP revenues, yeah, for the said time period, yeah.

So, from 245 crores to 352 crores, excluding bank.

Sorry, 300 and? 332. 32. 245 versus 332. Okay, so that's a 36% VAP growth in the standalone, right? Okay, okay. Get it. And for FY26 versus FY25, broadly, if you have the growth numbers?

Yeah, yeah. So, 759 crores of last year to current year, 842 crores. These are excluding the ghee and butter of the either consumer or the bulk. I am talking about pure wine, for mental products. Consumer ghee, last year, we had 81 crores. It is 1 of 6 crores.

Thank you. The next question comes from the line of Aditya with Securities Investment Management. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. Sir, if I look at your milk sales volumes, you know, excluding Osam, so they have dropped to now around 5%, which we were growing at around 8-9% for the last 2-3 quarters. So this quarter, even after Africa has grown strongly, why is there a drop in milk sales volume? And if you could just split the milk sales volume between India and Africa, how much have they grown?

Normally, milk sales does not increase much in summers because people use more of the products than the milk itself, and I think in the coming quarters, the milk sales will grow a bit more and come back to the normal trends, and also as the price differences increase in terms of the milk prices, we normally try to sell more of a higher realization milk and don't push much of a lower realization milk products. I think giving a comparison of what milk was in terms of, in absolute terms between Africa and India, Murali will give you the specifics in terms of the milk quantity of Africa and India.

Yeah, milk value we've done around 10.4 lakh current quarter. Last quarter we did 10.25. There is a minor increase in a milk like Sarthed, but it is a fiscal year of the summer. And with regard to the milk of 4 in South Africa, last year we done 161,000, as again, we done current quarter 2,14,000, that is around 33% of growth one day in the milk itself.

Great, understood. And now, sir, you had mentioned that cooperatives have taken price highs in ghee and butter, but what about liquid milk? So, what kind of price highs have they taken versus against earth?

So, basically, I think that the southern cooperatives have not taken a price hike. The national cooperatives like Amul and Madhaderi have taken the price hike. They are anticipating that even the southern cooperatives should take a price hike, like I said earlier in this earlier question. For example, Avan is facing pressure of not taking the price act, therefore not being able to pay on the suppliers on time, and therefore they will be bound to increase the pressure, which is showing in terms of, I think there were newspaper articles, I cannot confirm it, that certain higher loss-making with SKUs, they were not supplying, and that we've drawn certain higher loss-making SKUs from the markets. I think with those indicators, we should think that they will also be forced to take the price increase.

I'm sorry to interrupt, Arithya.

I would request you to rejoin the queue. Thank you. The next question comes from the line of Ankit Shah with White Equity Investment Advisors. Please go ahead.

Thank you for taking my question, sir. Sir, for Africa, can you give the procurement volume split between Kenya and Uganda for Q1? So only procurement volume, sir?

DDK will give you the procurement volumes of Uganda and Kenya.

Procurement volume, you know, in Uganda, you know, see, 1,24,000 liters, as the next, you know, 1,29,000 of previous year. And, see, take Kenya, and Kenya also, last year now we have done procurement only, see, Q1 now 96,000, 97,000 we have done, and last year we have done, you know, 66,000. There is a jump of 46% in Kenya procurement growth. And even as we have done, only procurement growth is 19%. Majorly we have done, you know, good growth in Kenya.

And, sir, what are the utilization levels here?

Kenya, now we are almost, you know, utilizing, you know, 80% utilization in Kenya because we have installed capacities of only 1.5 lakhs. Now we are already doing 1.1 lakhs. So, how did we have another 20%, 30% gap? But in Uganda, you know, since, you know, because we are targeting yogurt there, we have grown yogurt also good quantity there, and that's why, you know, we are planning for Greenville project. Uganda also is a full capacity, actually. Right.

Sir, you mentioned the realization increase from 68 to 65. So, this realization is the blended realization, 65 for Q1, and, you know, from this, should we see further margin improvement in Q2 as a fallout of this?

So, I think the first price that you have seen will be there, but as the seasonality comes in, procurement prices in Africa also increase in the second quarter. So, it will not be a continuous amount of the same, but we will not lose profitability, depending on monsoon, we will taper down and then again bounce back.

Thank you. The next question comes from the line of Sukrit Patel with EyeSight FinTrade. Please go ahead.

Good morning to the team. My first question to Mr. BVK Rating is, beyond the regular outlook, what are the top two, three execution priorities you are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in consumer demand shifts or competitive pressures? And how are you preparing to manage them while still strengthening Dodla's position in the daily products and value-added offerings? That's the first question. I'm going to take a listen to this. Thank you.

See, if you see overall Dodla, Africa now, we don't have, we have towards edge only. So maybe, you know, normally, you know, we do better results in the first quarter and fourth quarter. Slightly, you know, second and third quarter, slightly the margins. But whatever target, what we have wanted, taken a target budget, you know, that we will 100% will achieve as far as Africa is concerned, volume as well as EBITDA. And feed also now, we have almost, we have done per quarter also more than 25% growth. And EBITDA levels also now slightly, you know, there's a purchase price, raw material pressure is there. But even then, you know, feed also we are very confident. Budget numbers, both EBITDA and as well as, you know, volume both will achieve. And DDL, INEA, also now, you know, we have done a lot of corrections. And milk we have done, you know, earlier in the month of April May itself, we have done one rupee, more than one rupee correction we have done. And then we have already taken two rupees correction. And, you know, wrap we have done three, two, four rupees correction. So I don't see, you know, see, there will be always a pressure because, you know, I don't say there will be, there won't be any pressure. But clearly it is indicating that, you know, the impact, weather impact, you know, because of that only is the issue. Or otherwise, you know, would have been things, would have been better. See, there is no much of inventory, that's why there is a pressure, that's all.

Otherwise, you know, price correction will do that.

No, sorry, sorry, sorry, sorry, sorry, please go ahead. Yeah, that's what I said. Because of the L.E. norm, because of the weather pattern, the procurement, you know, and to see the anticipated level, it is not there. That's why there is a pressure, but we have already done a corrections.

Thank you. My second question to Mr. Murali is, from a financial point of view, what key risks or challenges do you anticipate in the coming quarter, and what specific measures have been taken to manage margins, cash flow, and balance sheet strength, especially in areas like raw milk, procurement costs, receivables, and regulatory compliance? Thank you.

Yeah. So, basically, it is more depends on how much you could be able to pass it on the cost inflation to the consumer. It also depends on the planning of the inventory, the procurement, and the sales, and also how the other competitors are playing in the field. These are the things which we need to have a capture, okay? Based on that, we will plan overall the absolute amount. We also grow in the EBITDA percentage. That is one thing. And with regard to the cash flow, we are a debt-free company. We have around 650 crores in the balance, and we have to see where we'll get able to optimize the return on capital employee. That's where we are working towards. And now, as of now, we are funding internal accruals for the OSO, for the Africa, and as well as for the Maharashtra. And we don't have any major issues in the accounts receivables. Basically, it is a cash and carry business, okay? Our average DSO is around one and a half day to two days. That's what we are doing. And payables, every 15 days, we will pay to the farmers. And all the transport and other payments will do it on a monthly basis. So we don't foresee any issues in the payables or the receivables. And the inventory, based on the movement of the prices increase or decrease

The next question comes from the line of Hitendra Pradhan with Maximal Capital. Please go ahead.

Hi, sir. I hope I am audible and thanks for giving all this detail. I just had one question and I wanted to get your perspective on the VAR portfolio, especially for Cod and Pani.

So, sir, what happens to the...

You are breaking up, sir. Hello, sir. Is it better now? Not. Go ahead, sir. Yeah, so just had one question on the VAR portfolio. So, what happens to the pricing and the working capital situation on the VAR portfolio in this environment when the procurement is somewhat stretched? I mean, in terms of pricing, in terms of margin and the working capital, if you can give us some color what happens to the VAR portfolio. Thank you.

Yes, sir. You're breaking up a little bit. I'll repeat the question before I get the answer. So one thing is you wanted to see what the WAP portfolio's impact based on the pricing of milk is going to be. And the second is regarding the inventory buildup that will happen in terms of milk pricing. If that is the two questions, I'll answer accordingly, sir. Yes, yes. Basically, the WAP does not, I mean, the milk procurement prices and WAP transmission has already happened and it has been done. So whatever was the milk procurement price for the WAP realizations, we have passed on the pricing to the consumer, and that will continue to be there. But majority, as you know, WAP will have a higher off-take during season and will come down during the off-season. So I think during the off-season, as we go in and the procurement prices remain the same and WAP remains the same, the profitability in WAP will continue. Regarding inventory, we still have to wait and watch. I don't think we have insufficient inventory build-up happening for us on our own come for the next year. We might have to end up being a net buyer. It will not affect our working capital as such because we don't have any, we have our limits, but we don't draw on our limits because we have internal accruals to the, you know, 600 crores also post our capital expansion. If required, we dip into our own reserves for our working capital requirement, and I don't think we will need much of working capital requirement I think because the same scenario of milk actually evening out and not surging high or low, I think in the coming days we might see that our own milk procurement, because we have built out our infrastructure also for a larger requirement for our new expansion that we are doing, I think we will not be having that much of an inventory build-up.

Okay. Thank you, sir. Thank you.

The next question comes from the line of Abhishek Kaniti with Nivaka Ventures Private Limited. Please go ahead.

Hello, can you hear me?

Yes, Abhishek, sir.

Yeah, hi. Hi, sir. Thank you for the opportunity. Actually, I just wanted, I'm new to this company, so, like, you know, I'm just trying to understand. So, like, if we take, like, three years down the line, how would our portfolio look like, you know, in terms of, like, how would you see Africa, you know, percentage of the revenue contributes to the revenue versus, like, how would you think the BAP would change?

So, again, there's a little bit of break-up, Apsheek. I'm presuming you're saying how is the break-up going to be between the Africa revenue and India revenue in the next two to three years that you are anticipating? I think our average revenue will probably contribute around 10%, and they will continue to be in the same trajectory of 10% in terms of maintaining it, because the larger pie is the Indian operation. Even a little bit of growth in Indian operation, Africa has to grow substantially large to compensate the Indian growth pie to become more in that. But the 10% in comparison with India growth also means it's a reasonable growth in Africa. That is the reason we are expanding our capacities also in Africa as much as we are doing in India. I think we're growing in tandem with the capital allocation of the expected operational returns. It will be the same for the next two to three years unless we get some brand new opportunities of acquisitions which are not there on the horizon, but if something ever happens, it might change. Currently, it will maintain the same scenario. So that is where it will be for us.

Sir, and in the Indian dairy business, how do you see the back moving?

Well, we normally target the same. Although the base is increasing, we look at it as a 10% of volume and inflation in India has always been around 4% to 5% that keeps adding. So to maintain this 10% by volume is what we have invested in Maharashtra and we have taken over Hossam as a larger scale expansion. So maybe one year or two years we might drop to 7-8% or some years we might go to 10-12% by volume, but 10% by volume is what we target for.

So just to add, we are on 70-80%.

The next question comes from the line of Bhavesh Jain with DD Investment Advisors. Please go ahead.

Yeah, am I audible? Yes, sir. Yeah, so I just wanted to ask, India's standalone business for the past four, five quarters has been in on mid-single-digit growth. So, I just wanted to understand and have your outlook on how do you expect growth from the core markets, and how much growth do you expect from the near markets of, let's say, Bihar and Maharashtra?

So, I think our core markets will try to be maintaining our market share more consistently, sir, because our core markets, like we explained, being relocated from the Karnataka or Tamil Nadu side, the price differential between the cooperators and other, We are already significant, and we don't want to keep pushing it further, and that is why we do more of geographical expansion. It is also proportionate with the correction measures that will be taken by the cooperatives. If the cooperatives do take a significant large price correction that had happened in the previous years, we will also be able to get more market share there and continue with our market share increase. But currently, it is because of the higher, we will not get a lot more entry into the ORECA or the local shops because of the price differences. We will try to maintain our market share. Maharashtra will be predominantly a milk-balancing procurement operation for us. We only have a 2 lakh diter kind of local market sales that we will be looking at the local area. Similarly, I don't think Ossam will be growing at 100% kind of rates because there also there will be competition. So that is the reason of the overall blend that we look at. We will look at it 10% growth in India by volume. The local areas being around maintaining market share would mean 5% to 6%. Your territories The next

question comes from the line of Manish Jain with Guamil 1 NLP. Please go ahead.

Yeah, hi. Wanted to congratulate you on the great work that you all have done on direct procurement. In fact, that is getting hidden in the numbers that you have shared. So, especially the kind of market share gains that you all have done from leading, competing dairy companies in the areas you are operating in.

So, really keen to understand

how you all are managing to create a very powerful procurement in your areas in India. And what is the share of direct farmer payment that you are doing?

Most 100% that we do, sir. Maybe if there are some technical errors, it might be different, but otherwise it's very insignificant. Otherwise, we can consider it almost as 100% direct farmer payment that we do. And regarding what you said as the strength, I think it is more of the human challenge that we have to develop in terms of the number of people involved because it's unique in its nature. It's like marketing in the front end of how do you create a brand or an operation. It is similar in the back end. The team makes a lot of, you know, to keep the team active, to keep the team more involved is where it goes. And I think in the days to come is also being ahead of the curve in terms of the new things that happen, right? For example, if you look at direct procurement payment, we or another companies were one of the earlier leaders who went in early and then were able to convert it to all the farmers. I think every time there is something new that comes, it is being aware and continuing to, you know, becoming better at that. I think qualitatively, we've also taken a significant large number of measures of MBRT to be improved. It's more an internal drive rather than external pressure, and as long as that internal drive continues to be there and the team is well-focused and stays well, it will continue to grow.

And a second question attached to this one is, have you seen decline in per-animal productivity, which other dairies have also seen?

So I think for us, per animal is a different data because we're not able to get significant data tracking animal-wise. It depends on regions and certain areas, the animal productivity increases, certain areas it might not. And I think we will in the days to come, it is there. But if you look at a farmer average, the farmer average has been increasing steadily. Over the past decade, it's moved up significantly per farmer production. Animal data is very difficult to pinpoint and project. But, yes, we do hear some states that, you know, the productivity of the animal has gone up. And for certain things like initiatives we have taken, when we are giving good quality feed, the farmers who are buying feed from, let's say, Dodla dairy cattle feed are doing around 14 liters per farmer as an average, which a non-Dodla feed consumer is only able to do around 11 liters per farmer average. So I think these initiatives also help in terms of improving productivity.

Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks.

So, thank you everyone for joining us today on this earnings call. We appreciate your interest in Dodla Dairy. If you have any further queries, please contact SGA or Investor Relations Advisors. Thank you very much.

Thank you, sir. Ladies and gentlemen, on behalf of Dodla Dairy Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.