Thank you very much. Good morning to all the participants.

On behalf of Dodla Dairy Limited, I extend a warm welcome to everyone joining us on our call today. On this call, I'm joined by our CEO, Mr.

B.V.K. Reddy; our CFO, Mr.

Murlimohan Reddy; and SGA, our investor relations advisor. I hope that everyone had an opportunity to go through the financial results and the investor presentation, which have been uploaded on the stock exchange and our company website.

During the quarter, we continued to maintain our revenue growth momentum, and registered a top line of ₹1,025 crores, with a year-on-year growth of 13.75%, backed by strong volumes. This quarter performance reflects steady execution across our core business despite a challenging operating environment, marked by weather-related impact on product mix and elevated procurement cost.

In this broad backdrop, we recorded an EBITDA margin of 7.7% and a PAT margin of 6.7%. On the volume side, we saw an increase in the volumes for milk sales, curd sales, as well as VAP products on a year-on-year basis.

The increase reflects our volume growth in Dodla products aided by the inclusion of Orsam full quarter performance, and robust growth in the African business. However, bulk sales of SMP and butter dropped to negligible levels in Q3 FY '26, as compared to ₹72 crores in the same period last year.

This indicates that the entire growth is driven by liquid milk and product sales. Additional value-added products like ghee, lassi, buttermilk, and ice cream, etcetera, which carry higher margins, had a lower sales contribution during the quarter on a sequential basis basis due to the onset of earlier winters and severe winters.

On a year-to-year basis, these products continue to deliver healthy growth. Typically, our procurement cost come down with the arrival of the flush season.

However, the trend was reversed this time around, and we saw about a ₹2.5 per liter sequential increase in procurement cost. This was primarily due to an industry-wide shortage of milk supply caused by erratic rain rainfall last year.

This increase in price was even higher in regions where we have stronger presence. For instance, Maharashtra increased to about 10%, and the other four states it was around 6% to 7%.

The increase in cost was not fully passed on to the selling price owing to the subdued demand during the winter season, therefore focusing on maintaining market share. This created additional pressure on the gross margin.

The pricing strategy is in line with the industry trends, and we expect the situation to improve in the upcoming quarters. With a combination of these above factors, we have registered a gross margin of 26%, as against 28.2% in Q3 FY '25.

We expect some pressure to persist in Q4 FY '26, with a revival anticipated as we move into summer. We also took a one-time provision of approximately ₹6 crores during the quarter towards the revised labor code guidelines, which was counterbalanced by positive impact of tax reversal relating to earlier years of ₹22 crores, due to a favorable order at ITAT.

In Africa, we delivered strong year-on-year revenue growth of 34.5% during the quarter, driven by a focus on expansion in Kenya markets. We are currently pricing our products competitively to gain market share and scale.

There and the 9 months ended of Africa operations, we have done well in terms of our operations. We have actually increased our EBITDA from ₹31 crores to ₹39 crores, although as a percentage it might seem slightly on the same percentages, our profitability has increased in the 9 months.

We see a strong growth potential in East Africa dairy markets, and towards that we are planning for a greenfield expansion project in Uganda, where they secured a land parcel of 70 acres. We plan to do an indicative CapEx of around ₹50 to ₹60 crores over a span of 2 years.

With this, we expect to expand our market share in East Africa from low single digits to high single digits. This will help Dodla Dairy in capturing growing marketing opportunities in East African dairy sectors in the long term.

Coming to Orgafeed, this business continues to deliver stable performance with double-digit growth. The revenue for the quarter grew by 16% with an EBITDA margin of 11.6%.

In Q3, there was inflationary pressure on the raw material prices of the feed business, which we did not pass on immediately to the customers to maintain farmer relationship. This resulted in some additional pressure on the margins.

We will be increasing our volumes and growing this business. For the 9 months, the Orga business has done well, from a 13.4% EBITDA margin to around 14.3% EBITDA margin, which is roughly an increase of EBITDA from ₹13 crores to ₹17.6 crores as an absolute number.

We continue to focus on product innovation. We have recently launched new offerings such as masala paneer, chocolate sonpapdi, milk cake, and new flavored ice cream variants.

As a people-driven business, our priority remains a strong farmer and customer relationship. We are hopeful that we will reap the benefits of this healthy relationship in the upcoming quarters.

With this brief, I now hand over to our CEO of our company, Mr. B.V.K.

Reddy. Thank you very much.

Thank you, Mr. Sunil Reddy.

I will now walk you through consolidated performance highlights of our business. During the quarter, our milk procurement stood 18.3 lakh liters per day, which is an increase of 7.5% year-on-year basis.

The average procurement cost in Q3 FY '26 stood ₹39.8 per liter as against ₹37.3 per liter in the previous quarter, and ₹35.6 per liter in Q3 FY '25. However, we did not pass on the entire increase in cost of the customers.

Our average milk sales price for the quarter stood ₹57.7 per liter, which was ₹57 per liter in the previous quarter, and ₹55 per liter in Q3 of FY '25. This was a primary reason for our margin being under pressure during this quarter.

We expect to mitigate this situation in the coming quarters. Additionally, since there is no increase in our fixed expenses pertaining to the Orsam business, we expect margin improvement once we start scaling up in terms of revenue.

Now coming to product sales mix. Our liquid milk sales remained at healthy level, 13.9 lakh liters per day, delivering a growth of 19.6% on year-on-year basis.

Total value-added products stood ₹258 crores as against ₹281 crores in Q3 of FY '25. Excluding bulk sales, VAP delivered the growth of 23% on year-on-year basis.

Curd sales remained stable at 355 metric tons per day with a growth of 15.5% year-on-year basis. Other products like ghee, buttermilk, lassi, ice cream, flavored milk, etcetera, had a lower contribution compared to Q2 due to early onset of winter on year-on-year basis.

These products continued to deliver healthy growth. Speaking to expansion projects, our Maharashtra project is progressing as per the scheduled timelines, and is expected to start commercial operation by end of FY '27.

The civil work is under process, and ₹69 crores worth investment is already been done. We also made a decent progress towards improving Orsam business operational efficiencies.

Since after the acquisition, we are continuously worked on improving its quality and upgrade the infrastructure. This will position Orsam to improve its contribution towards overall profitability once we start scaling up the revenues.

Lastly, as mentioned by Mr. Sunil Reddy, we are also working towards the greenfield expansion in Uganda.

The project will be completed in two-phase manner. The phase 1 will be comprising the diverse dairy portfolio including flavored yogurt and milk variants like toned milk, skimmed milk, and full cream milk, value-added products also such as paneer, cheese, ghee, along with a mineral water.

Phase 2 will be expanding a long-life milk, ice cream, and milk powder. This project is expected to start generating revenue by end of FY '28.

All these initiatives will help us to build a strong base for Dodla Dairy to capture the continually growing opportunities in India as well as Africa, and deliver a consistent growth for a longer period of time. We remain committed to discipline capital allocation and long-term value creation for all the stakeholders.

With this, now I request Mr. Murlimohan Reddy to share the financial results.

Thank you, Mr. B.V.K.

Reddy, and a very good afternoon to all the participants in the call. Talking about consolidated financial performance in Q3 FY '26, revenue from operations for Q3 stood at ₹1,025 crores, registering a healthy 13.7% year-on-year growth compared to ₹901 crores in Q3 FY '25.

Gross profit stood at ₹267 crores with a margin of 26%. From this quarter, our fixed expenses include impact of Orsam in fullness.

Employee expenses for the quarter increased by 30% to ₹52 crores on a year-on-year basis. Other expenses increased broadly in line with the revenues as a percentage of sales and stood at ₹135 crores compared to ₹118 crores in Q3 FY '25.

However, in absolute terms, there was increase, which was primarily driven by the volume growth of 15% on total dairy value, infra addition towards rent, employees, travel and conveyance cost as head count during increased by approximately 250 employees, higher transport cost due to a product mix shift from bulk sales towards liquid milk and value-added products. EBITDA for the quarter stood at ₹79 crores with an EBITDA margin of 7.7%.

Depreciation expense increased to ₹22 crores compared to ₹20 crores in the same quarter last year. Other income for the quarter grew by 8.3% to ₹12 crores on year-on-year basis.

During the quarter, we recorded exceptional items of ₹5.7 crores, representing a one-time impact due to an increase in gratuity liabilities arising out of past service cost on account of changes in labor laws. Additionally, we received ₹21.8 crores of tax reversal relating to earlier year due to favorable order at ITAT.

Net profit for the quarter stood at ₹69 crores with net profit margin of 6.7%. Now coming to 9 months FY '26 performance, revenue from operations grew by 8.5% year-on-year and stood at ₹3,051 crores as compared to ₹2,810 crores in previous year.

Gross profit stood at ₹808 crores, up 4% 4.4% on a year-on-year basis. EBITDA for the period stood at ₹255 crores with EBITDA margin of 8.3%.

We reported profit after tax of ₹197 crores with a PAT margin of 6.5%. Thank you.

We are open for questions now.

Hi, sir. Just have a few questions.

When are you expected to take the price hike to sort of safeguard from this higher procurement prices? What quantum of price hike would you require in the near term?

Basically, we will be looking at it more from a point of view of the summer setting in from a market point of view. As the sales volume start to shoot up, we normally take a price increase because we will have to compensate that lack of milk.

In terms the other way around, if procurement does come much earlier and if there is more milk, there will be a reduction in procurement, and we will anyhow get the benefit of both. I think the arbitrage that we will be looking at the current moment will be anywhere between ₹2 to ₹3 as a requirement for the price increase that we need to do across the board.

Roughly, we are now at ₹60, ₹61 as an average realization, and with the product mix we'll have to make it to ₹63 or ₹64 is where we'll be looking at from a stand-alone India point of view.

Sir. My second question about the value-added part.

How should we sort of see the entire value-added part over the next say few years? How it is likely to grow?

What would be the larger composition of value-added? I think as of now curd is the maximum of the value-added part.

How this will change and will it effect our working capital because our working capital as of now is pretty lean? Suppose if the value-added part is sort of higher for paneer and other value-added product, will it impact our working capital also over the next few years?

Basically, our value-added product portfolio has in fact grown from 23% to 25% compared last year to this year, it has grown by 2%. It was only the impact of what we had as our bulk sales, which I think was close to around ₹250 or ₹300 crores that we had last year that is not there this year, that is showing the overall decline.

Otherwise, we've been having a good growth in our value-added products from 23% to 25%. Our milk growth has also been growing steadily.

Because of the lack of the bulk volume that we have, it is showing a significant drop. Yes, despite having a bad summer where there was no summer and we didn't sell our high-value products, we've still been able to move our value-added portfolio.

In my view, I think paneer is also beginning to inch up from our point of view of sales, which I think has moved from around that 1 ton to 3, 4 tons. Ice cream is also moving, and curd will continue to move.

Paneer will be a new entrant coming in as a volume based game that we'll be playing with. That will be the drivers for our value-added component as a domestic part of India.

I think over a longer period, like I've always been repeating that around a 30%, 32% can be the targeted value-added component in the overall composition.

On working capital point, sir, how it would impact the working capital?

For us, it will remain the same, sir, because whatever we do, we either move it through distributors, we have only a very small exposure that we directly sell to the modern retail, where it might be a 30-day payment, but that number is very, very small. It will not move the needle at all.

It is only the bulk commodity that the working capital will be required for.

Sir. Thanks for the answers.

Hi, sir. Thanks for the opportunity.

Sir, just wanted to check how the procurement price is trending in Q4. Generally, we see Q4 has higher procurement prices than Q3, is it the case this year as well?

See, I think Q3 itself our prices have gone up, Q4 is only a marginal difference of prices. This is what we anticipate our summer prices to be.

That is up to the March season that we see. Unless there is going to be a significant drop in milk, we don't see any more further price increases happening in Q4.

Understood, sir. Sir, secondly, now this Africa expansion, just wanted to understand how big a capacity we are putting in Uganda.

From what I understand, we already have a good market share in Uganda. This capacity is for any other country or for Uganda only?

It's basically for Uganda only. What was earlier that we had as our capacity is for the variations that we have as earlier capacity, and that was predominantly designed for our long-life milk.

The newer expansion is for entering into a whole new category of pasteurized and day-to-day milk. Mr.

B.V.K. will explain it more in detail to you.

Yes, sir. See, in Uganda especially, we are planning only for Ugandan market only.

In Uganda, the fresh milk sales is very dominant actually. Loose milk sales is more especially in Kampala city.

Our existing plant is more than 300 km away from the Kampala city. Now what we acquired land is closer to the Kampala city, capital city, 100 km closer to the city.

There we are planning a fresh milk in a Kampala city because we have a lot of scope, because the local dairy is also fresh milk is selling. One more, yogurt capacity is already full, the existing plant.

Yogurt plant also now we are planning bigger yogurt plant in the new capacity. Apart from that, also we are planning maybe in future phase 2, ice cream, mineral water, and some Indian products like paneer, some ghee, because a lot of Indian population also is there.

We take it up these phase 1 and phase 2.

Understood, sir. Sir, what is the capacity for this expansion, and what kind of revenue potential would be possible on full utilization?

This new plant what we are planning now, we are planning to set up a 3 lakh liters capacity.

Doubling

the capacity. Doubling the existing capacity.

Revenue, you can roughly look at it as being around that ₹60 liter kind of a scenario. Even if you do around 1 lakh, we can go to that ₹100 crores, ₹150 crores to start with.

Understood. If I have to understand, what is our current market share in Uganda?

That is a very difficult question because what happens is the unorganized loose milk that is extremely large to get specific data. I think we can still look at it as a reasonably large in terms of 3 to 5 lakh liters as the market that we're targeting as in the fresh and pasteurized milk segment along with the yogurt.

In yogurt, we're a significant number one, actually. See, the yogurt market, if you've seen our overall Uganda yogurt market is only roughly about 1 lakh liters.

Then, 50% almost 40% to 50% we are doing yogurt market. See, fresh milk it is totally still unorganized.

Understood, sir. Sir, next was on Orgafeed.

If I look at your revenues, they are stagnated around ₹40 crores for the last three quarters. Just wanted to get a sense how is Orgafeed doing now because I think we were guiding for around 1 ₹180 to ₹200 crores this year, but I think we'll fall short on that.

Just wanted to get some sense how are you doing on that front.

Basically, Orgafeed, like we've always been saying that this year has been a weather anomaly of the summer not existing, which is also a peak sale for Orga, when there is no cattle feed available, shortage will be there and concentrate feed also increases. In spite of that, we've been continuing to do.

The differential will only be off by a kind of a 1 month of a difference in terms of revenue. I think already we are seeing uptake or increase coming in in Jan itself.

We are moving from our 5,000 to 6,000 tons of [unclear]. Murli will give you specifics.

Last year, if you see Orgafeed quarter of quarter-wise revenue, it was very like 31, 32, 34, and 33, average around ₹33 crores. If you see current quarter, we are at quarter-on-quarter basis there is 16% of growth in the revenue.

On 9 months period also, there is almost 24% of growth in the revenue. Even if you see bottom line also, even for the quarter little lower side, but if you see 9 months period, we are at 13.4% of EBITDA, increased to 14.3%.

In absolute terms, from ₹13 crores to ₹17 crores. That is almost a 33% of growth in the EBITDA itself in the Orgafeed.

We are going in the right direction as of now, but we agree that there is a ₹1 crore of shortfall in the current quarter.

Sure, sir. Understood.

Sir, what was the revenue and EBITDA for Orsam this quarter?

Orsam, I think this is a full quarter, and I think Murli will just be giving you the specifics, sir.

Yeah. The revenue for the last time we had only 2 months, that is ₹52 crores.

For the current quarter it is ₹80 crores is the revenue. EBITDA last time it is 1.3, but this time it is only ₹85 lakhs because of so much of streamline was made, and SAP implemented, and infrastructure was also increased.

Understood, sir.

We expect some uptick in the margins going forward.

Got it. Lastly, sir, what was the curd sales amount in

Yeah. Thanks for the opportunity.

Sir, congrats for good set of numbers considering the macro environment. Two questions.

There is an expectation of El Niño in this year. How do you see the milk prices?

Because mostly it may result in higher summer days or maybe weaker rainfall also. If that happens, how are we protected?

Then second question, how are the cooperatives reacting to the milk inflationary situation? Means have they been proactive in terms of taking price hikes or there has not been much price hike?

How do we see the situation from a competitive perspective also? Yeah.

Thanks. Thanks from my side.

Thank you very much, Aniruddha. Basically, for in preparation of our Maharashtra itself, we have added a lot more capacity in terms of procurement, chilling centers.

B.V.K. will also give you the specifics as we go forward.

It is has an ongoing scenario. To your question of if there is an El Niño and there is a severe summer that comes in, and the gap between the sales and the procurement does keep on increasing, there will be no other option but to pass on the impact of cost to the customers, and it will happen as regular process that goes on if the severe El Niño does come in.

If not and if it is a regular year, and I think if it is my personal opinion that if the farmers have become more organized and if we don't see that much of an impact, it will maintain status quo, and we will be able to take a price increase in the summer for as the regular other value-added products will start to increase if the El Niño summer days are good, which we missed in the current year financial year, which what we missed in the current financial year. Coming to the cooperatives, it is becoming a little more I think everybody is sort of maintaining a status quo, not much of a difference.

Maybe Amul might have done a little corrections here and there, but otherwise, I think everybody is maintaining a status quo, and more or less waiting to watch and see how the mid-February and or the beginning of March's will start to turn around in terms of temperature, climate, and weather. B.V.K.

will explain a bit more in terms of the procurement and how we are trying to see to improve our procurement.

Aniruddha, if you've seen on last year entire year from January to December, we added roughly about 51 locations in the procurement. Majority CMCs and some chilling centers.

All that infra whatever we added in this last financial year, that is going to reflect in this coming years. I think the kind of infra what we added, any kind of situation, we'll be self-sufficient in our procurement.

Maybe cost depends upon the overall market scenario. As far as the volume is concerned, know that we have done enough infra.

We will not run short of any procurement.

Yeah. Sure, sir.

This is extremely comforting. Just one point.

This year has been a bit softer for value-added products considering the rainy season started early and in fact, it ended also pretty late. For next year, do we see higher potential in the value-added products, especially ice cream and curd?

More than ice cream, we are confident that our paneer and curd will move up the sale. Orsam also, which we have acquired, has a little lower in terms of value-added products there as a consolidated, but I think from a stand-alone of India minus Orsam, we will increase our paneer, curd, and because if the summer comes, as you're saying, El Niño, what we missed out on the first quarter of this year will again come back and will be showing stronger growth.

I think it'll do well for us this year.

Okay. Sure, sir.

This is really helpful. Many thanks, sir.

Thank you.

Yeah. Hi.

Good morning, sir. I have two questions.

The first one is specifically with respect to paneer, which is very small right now, but growing at a very healthy clip. As a byproduct, we are also getting whey.

India is a country, anyways, we have lower protein consumption per capita. Overall, how are you thinking about growing both paneer as well as whey going forward?

For us, see paneer will not be compared to in same terms of whey, we will not be having that much of paneer in the next 1 year that it will come to the extent of looking at whey. In the summer months, we anyhow use the whey into our other fermented products as a regular operational process that we do.

We have now moved from let's say a 1-ton scenario to a 3.5-, 4-ton kind of a daily sales of paneer, which we are trying to see if we can push it more in terms of growth. I think the whey game will come in once we move significantly larger to 10, 15 tons of paneer per day is when we will start adding the whey requirement.

That is as far as the operation comes on in terms of paneer and protein requirements coming from there, the operations of what we are looking currently as a stand-alone. Also the other opportunity that we have is Orsam, where currently it is only 13% of Orsam sale is value-added product, which we think we can also see a significant uptick there, even if we move it back to the 20% or so on the overall size.

That will also significantly add to terms of the overall value-added portfolio as we go forward in the days to come. Paneer and whey, that is to your question.

I think from a protein point of view, we're all waiting to see significantly if it is going to move from a niche product to a little bit more of a mass product. If it does even show some tractions, I think most of us are ready to immediately be able to get into the higher protein market, because it's not a very complicated part on the manufacturing side, it's more on the placement and the demand uptick side.

Understood, sir. Sir, the second question is with respect to Maharashtra, given that next year will commission our factory.

Given that you can keep increasing procurement in that geography to begin with, what could be the ramp-up plans in Maharashtra? Because you are already doing a lot of procurement in that state.

Sir, right now we are doing around 2 2 lakh, 2 lakh 10,000 procurement from Maharashtra. We have planned, this financial end of this financial year our own procurement will be around 5 lakhs.

The infra we are already creating, we have taken enough manpower. The people are in the field and we keep on expanding, we're adding new chilling centers.

Before commencing our plant, we will have in Maharashtra roughly about 5 lakh liters. Addition will be another 3 lakhs, existing is 2 lakhs, additional there'll be 3 lakhs procurement in this financial year.

That is from a Maharashtra point alone, sir.

Understood, sir. Thank you, sir, and all the best.

Thanks, Resham, for you.

Yeah. Hi, sir.

Thank you for the opportunity. First question is on the Uganda capacity expansion.

What is the current utilization for Kenya and Uganda, if you can give, and also for India? How will this ₹50 to ₹60 crore be funded?

Will it be through internal accruals, and when is the plant commencing for Uganda? That's my first question.

Okay. Thank you very much, Abhishek.

See, basically what is happening is our Kenya plant is also reaching almost full capacity utilization. Uganda, although we have a capacity that we keep declaring as the 3 lakhs, effectively from a curd point of view that plant has reached its own fulfillment, and the UHT lines and the other lines that we have still have that growth of capacity.

Like Mr. B.V.K.

had explained earlier, now this we are looking at getting more of the opportunity of the fresh side of milk, and considering both the distance that is required and the pasteurized milk segment, which is larger than the UHT segment in Uganda, we want to be in the whole milk cycle of the Ugandan country. I think by going into the fresh milk, we'll do well.

Also as B.V.K. was saying earlier, this gives us opportunities because now we have got a well-entrenched sales distribution and collection scenario, which given the addition of the other things, although it might be a small like mineral water or the ice creams in the days to come, we will be a significantly large player there.

That is the reason why we are looking at it as an expansion to make sure that even in the next 5, 6 years, we will be able to be very comfortable without looking and also diversify our portfolio into other Indian products like paneer, which can cater to the local population as well as the Indian diaspora. Now bringing it to the point of the capital requirement, we generate healthy profits in Uganda, and we will redeploy only those profits.

We don't need any additional money unless we see some opportunity of interest arbitrage or any other such things. Otherwise, we have enough of internal accruals to take care of our own requirement of capital growth.

Sir,

when is the plant commencing?

2 years from now, we think it will be in the end of the financial year '28.

Great, sir. Just one last bookkeeping question from me.

If you can give the consol overall realization and the VAP realization for the third quarter.

For the consol for third quarter for realization, VAP realization consol, right, sir?

The consol realization is ₹59 consol. Okay?

Stand-alone for the quarter is 60.3. When you talk about only milk realization is 58.15 for the stand-alone, consol 57.68.

Sir, for VAP? For the VAP consol?

Just a minute. Murli will give you the details for the VAP realization and

VAP realization in India per liter is basically it's a mix of 251 for the value-added products, fat it is around ₹486. At

the consol level, sir, for the VAP?

VAP is a mix only

that for consol. That'll be the consol level at Consol

level only. DDL India, if you talk about only DDL VAP, it is ₹65 because it more depends on the product mix.

LDL, it is only ₹82. Fat products, it is a 486 for DDL India.

Understood, sir. Maybe I'll take it offline.

Just a final one. In response to an earlier question, you said that in Maharashtra, you will have 5 lakh liters per day by the end of the current financial year, before commencement of the plant.

Where is this 5 LLPD Where is the 3 extra LLPD coming from? Just wanted to clarify that.

See,

the surrounding districts only. We are targeting only from our main plant 150 km radius.

We are setting up plant, closer to Solapur, 30 km before Solapur, and we are concentrating only couple of districts closer to the plant. Radius is roughly about 150 to 175 km radius we are concentrating.

To add to it, there is plenty of availability there, and that's the reason we've also started that infrastructure like we explained earlier of these CMCs and chilling centers that we're being creating. I think It's a balancing act of when the plant comes closer to production, when do you push your procurement, so that is the way it will go forward.

All right, sir. Thank you for the responses, and all the best.

Thanks.

Thank you.

Yeah. Hi.

Thanks for the opportunity. I had a couple of questions.

The first one was on the procurement in terms of the ex-Orsam kind of procurement growth. That growth seems to have been only about 1%, 1.2% year-on-year.

Just wanted to understand, despite the contribution of Maharashtra to the procurement, if this ex-Orsam procurement has only grown 1.2%, does that indicate that procurement in the non-Maharashtra kind of geographies has kind of taken a dip during the year? If you could throw some light on that.

No, no. Last year also, it was inclusive of Maharashtra, which Maharashtra also had, I think, 1.5 or 1.6 lakh liters of procurement was already there.

It was not that came in the current year. Current year maybe it increased by that Orsam.

It was only that Orsam that came in as additional. Yes, like we were saying, the whole reason of the shortage of milk in terms of the flush season, there has been absolutely no flush, it's been continuing to maintain only a flattish kind of growth in terms of being very flat in terms of volume of milk.

That is the whole reason why the price is increasing, sir.

Excluding Orsam, DDL India, the growth of the procurement is 3.74%.

Q3.

Q3. Okay.

Then for 9 months consol

9 months.

Right. No, I was looking at more from a Q3 to Q3 perspective.

That growth seems to have been 0.2 1.2%.

It is almost flat.

1% down, it is almost on the flat.

That's the whole reason, sir. Like last year there was a what we call as a flush available, this year there's been absolutely no flush.

It's an off year.

Understood. The other quick question was on the margins.

I think for a 9-month basis the EBITDA margin is somewhere around 8.3%. Just wanted to understand, previously you had talked about margin ranges being between 8% to 9% to 11%.

Do you still think, given the current challenges, is that a range that can be maintained over the next 2 to 3 years or

That will be the range. Like I said, it's always 1 quarter issue.

In fact, it's a summer quarter not having the range as well as the winter not having flush, it's a very unique kind of a scenario. Even in that scenario, we've been able to maintain our average 8% margin.

It is only the optimism that it can only go up and not come down. In a good year like last year, it will go up to that 10%, 11%.

If it is a bad year, it will move up to that 8%, 9% kind of a margin, which we have been saying all the time.

Understood. Thanks for the response.

Hello, sir. Thank you for the opportunity.

Sir, first question, how much was the India volume growth ex of Orsam in liquid milk and in VAP separately?

Yeah. India total overall growth including the bulk business, milk is 4%.

Excluding milk that is VAP is -3% because these are the last year we had around ₹312 crores of the bulk business. If you exclude the bulk, with regard to the milk business, we have grown by 3%, and non-milk 3%, 3.5%, overall average is also 4%.

If you see the excluding the bulk, the revenue when you talk about, 9% was the growth in the milk and 11% was the growth in the non-milk without bulk. Overall, the revenue was increased by 10%.

Okay. Okay.

Sir, the follow-up question to this is, what's the company doing to increase the growth rate here? Like in terms of distribution touch points or sacrificing on pricing, because the growth rate for the company has fallen quite a bit.

If you can give some sense on this. Second question is, the margin trajectory that you spoke about, that this quarter would be the lowest.

How should we look at it from a margin standpoint from Q4 and next year, given that you have variable moving parts, procurement prices, your own price hikes, competition? How should we view growth and margins both?

I think doing this lower volume growth for us, I think is actually we're taking it as in a tough year where we have lost an entire summer and also having a price pressure in the winter time, we're able to maintain at least a 4%, 5% growth, I think is more from a point of view of what the work has been done in terms of brand recognition, and deeper penetration that is happening. I think it depends again, right, of the slight improvement in seasonality, and this should have been a little more to come up to the 7%, 8% very easily.

Entire summer quarter that was lost is the reason why the overall is dropping, and also good reasonably bitter winter that has been existing now. We expect that to come back to the 8%, 10% of volume, which we always keep saying that is in the little longer term.

Short term for this quarter, we will know by end Feb or March we can see what the uptakes and volumes are going to be like. Now the margins that we're looking at, I think we'll be able to maintain this 8%, 8.5% margins for the coming quarter also with the consol level of all Africa and all that.

There might be a slight dip from the India side, because if you look at HR Foods, it will be a little larger in terms of two quarters and there will be a lower margin there till we set it right. That might bring it down a bit in terms of the overall, but it'll be very small.

Overall, we will be able to maintain these 8% to 9% margins for the fourth quarter and for the year.

Sure, sir. Got it.

Sir, you mentioned about the Maharashtra procurement plan. If you can talk about the revenue plan for Maharashtra starting in the first year, how much revenues do you expect to come?

Is it entirely B2C milk, B2B milk? What kind of margins would you make in the first year, considering the product mix and also the manufacturing cost that you'd have to incur?

Roughly, we can look at a ₹500 to ₹600 crore of revenue in the first year coming in, because I look at it very simply as a B.V.K. said, even a 3 lakh increase with a ₹200 crore per lakh liter, even if I consider it to be base commodity kind of a business also, that will give that kind of a ₹500 kind of crore of a revenue.

That, again, I'm giving you two sides. One side saying it will be only a pure commodity and we are stuck with a 3% to 5% kind of an EBITDA margin.

That can add the out of the ₹500, ₹600 crores into a 3% will be the ₹18, ₹20 crores of EBITDA. If the volume of other products and sales comparatively in the matching size go up even a little more, because even local sales of Solapur will start and we will be in the initial teething time, that can also move up to 7 6%, 7% as just that piece of the operation itself.

Because we will also be pushing more of the consumer ghee and other such things. The variation can be if it is pure only bulk and nothing we do also, it can be between 3%, 4% or 5%, and it can move to 7%, 8% as a regular operation.

That is the range that it will be at, and considering a ₹500 to ₹600 crore kind of a top line purely Maharashtra additional.

Understood. Sir, from Uganda, what should be the similar financial trajectory looking like for the new plant that we're putting up, the top line that we should build in and the margins, I suppose, are higher in Africa?

Yeah. Uganda, because it's still 2 years away, we'll have to wait and see exactly what will pan out by that time.

We are going ahead with now, at least to start with in a year of operations commencement, adding at least a ₹100 crore of revenue. Normally, when Uganda is also a little higher in terms of EBITDA margins, we can think of 15% kind of EBITDA margins on what we are going to be adding in the year one of operation itself.

In a couple of years, as soon as the plant turns on, that is the kind of operation size we're looking at. In the longer term, it has also got that much larger potential of growing.

If we can cross that 1.5 lakh liters kind of a milk and product portfolio, it will be significantly larger.

Sure, sir. Got it.

Last question, sir, what's the balance amount of CapEx spending for the Maharashtra plant? How are we looking to fund it?

Uganda, apart from the land, how much CapEx would be needed?

Basically, Murli will give the specifics. I think Uganda will, as you said, it's a 2-year long process.

We're taking an additional ₹50, ₹60 crores for Uganda. Regarding Maharashtra, Murli will give you that.

We have planned for ₹280 crores of CapEx. Out of that, ₹69 crores we already spent.

₹212 crores is yet to be spent. All the orders have been placed.

It's only the timing of everything coming into place and going in.

The funding of this would be internal accruals, right?

As of now, we are planning for subvention scheme, but the application is in process. If that happens before March, we will do that.

We'll utilize that. Otherwise, we'll go for the internal accruals.

As on date, we have around ₹630 crores in the bank. We will utilize this money.

Sure, sir. Thank you so much.

Thanks.

Hi. Thanks for the opportunity.

Just wanted to understand, you spoke about the milk shortage. A, are you seeing a milk shortage being more accentuated in cow milk or in buffalo milk?

In that context,

Yes, sir. Sir, if you see the milk procurement in the first quarter, second quarter, third quarter, no, slightly, overall procurement is coming down in India.

Even in the buffalo milk also, see not much of growth. See, first quarter we have done stand-alone in DDL, 16.75 lakhs.

The second quarter it became 16.7, and third quarter became 15 lakhs. We are now fourth quarter we're expecting, I'm see now averaging it only 14.5 lakhs.

It's again the first quarter of the next year, it may go up. Basically, our buffalo is very, very small portion, sir.

We are majority only in cow, and I think that all the areas the impact is there. It's not only been one area here and there, entire India.

Got it. Therefore, in that context, the reason I was asking that is the bulk fat sales that were there this year, how should one think about those in context of the coming financial year basis this procurement strategy?

Do you see those bulk fat sales sort of coming down? Because they are margin dilutive and working capital intensive.

Yes, sir. That's what we didn't have any bulk this year itself.

Like if you take the quarter, last year the same quarter we had around ₹70 crores, this year was zero almost, negligible. It was only ₹1 crore.

Around ₹1 crore. 9 months, ₹36 crores.

We might, in fact, become net buyers rather than net sellers if there is a remaining shortage in the quarter coming up. In fact, whatever we have been gearing up for Maharashtra will only work out positive for us in terms of getting more milk into the system even if the drought sort of tends to continue, failing which, we will then be moving back to our ability of moving into the commodity.

As of now, we don't see any commodity happening in the near term.

Got it. The second question was in terms of milk procurement prices being different across states, with Maharashtra having added, are you seeing the weighted average price move up for your procurement?

Therefore in context of that plan of 5 lakh liters per day, how should one think of procurement prices on a weighted average basis?

Maharashtra because it's got a lot more of the commodity players, the yo-yo effect is significantly higher in Maharashtra. Like I said, if we compare it, this year Maharashtra has gone up 10% compared to the rest of the states going by 6%.

When the drop happens, Maharashtra also drops significantly. I think as an average, we normally see Maharashtra to be a lower price player than a high-priced cost player.

It is only that it goes through that little bit of that high and low seasonality that comes into play. That is what it will be, and the overall basket will always sort of not be significantly larger.

It will be in the averages, they'll all be the same.

Got it. Thank you.

Thank you. Sir, clearly, this has been a challenging quarter.

If I were to look at the India stand-alone numbers and exclude fat revenues, right, there's been a challenge here in terms of growth for the last 1.5 years, almost 2 years now. Right.

In FY '25, if I were to exclude the fat revenues, we grew at 7% versus FY '24. Even if I look at the first 9 months, and if I were to exclude the fat revenues from the India stand-alone numbers, we seem to have grown in low single digits.

Sir, what is the challenge here in India stand-alone numbers excluding fat? Are there certain gaps or specific challenges, gaps in terms of execution, which we're trying to fix or if you would like to talk about?

Also in that context, is there some market share loss that has happened in the India business? Because if I look at our peers, the two southern listed peers, right, they have still grown in their India business, right, over the last almost 2 years.

Also your market share estimates, if any, are they based on internal estimates or do we subscribe to any syndicated data like Nielsen? No

syndicated data, ma'am. Our market share estimates are only our own.

Compared to the things that we are saying as the volume growth that we look at it as a 4%, I think even with the listed peers, it will not be significantly different in terms of it. It is only the value add or the bulk sales that keep adding the differential of moving it around.

The major issue that we think is that the cooperatives which are normally as comparatively sell it at a less, and the private sector being more at a premium sale, the B2B business is not something that we normally get to. I think from the overall consumption pattern, most of the states we are there that the conversion from unorganized to organized is sort of over, and it's only the organized consumption growth that we are trying to cater to and keep getting more of the market share that grows.

There are no more white spaces that are available, that is why we are doing our acquisitions and growing into northern India and certain territories where there's more of white space availability. Existing markets, that is the reason why we look at them as that's the reason that we see lower trends, but unorganized to organized is declining, A, and the B2B going to more of the cooperatives on a pricing ground, and we taking up more of the premium consumer market share is where it will be there.

From the southern markets, would it be fair to say that we have fairly become like a mature player there? Is that what you're trying to suggest, and hence, the route to grow in Indian markets would largely be inorganic?

Inorganic, yes, from the liquid milk side, ma'am, but I think again we'll have a little more opportunity coming from the product side, where the consumption pattern, the southern states as the GVPs are growing up, more than liquid milk, it will start adding into the paneers and the curd and the lassi and buttermilk, those will start moving in more. The value add will start moving in a little more, and the liquid milk will also move, but not in that significant volumes.

Right. The second question is on the price hikes.

I think you alluded to the price hikes which will be taken when the summer sets in. Would it be fair to say that we won't be able to take price hikes before March end or early April, which means any uptick that we see in terms of margin will largely happen in the Q1 of the next financial?

Not that way, ma'am. I think the definition of summer is going to be where we'll have to wait and watch if the temperatures start moving up in say mid-Feb or early March, then the uptake will start happening from March, failing which, it'll be from April onwards, definitely, because I'm sure this cold waves are not going to continue from the last year to the current year also.

El Niño is what the prediction is that it will be the other extreme now of severe summers. Right.

Sir,

the last question is basically on the Africa business. For 9 months, what's been the broad revenue split between Uganda and Kenya?

Even between these two nations, do we see any differential in the margin? Also if you could repeat, we've seen milk inflation in the African business as well?

Typically, what is the seasonality or cyclicality in terms of milk inflation there?

Africa also does go through seasonality of the winter, rains, monsoon, and summer coming in. Uganda is a low-volume, high-margin country of operation.

Kenya is a significantly larger volume and it's a comparatively as compared to Uganda, maybe 2%, 3% in terms of margin being a lower margin, and we also have the interplay between Uganda and Kenya. As these two countries sometimes when there is a shortage, if Kenya allows, we move more cheaper milk from Uganda into Kenya and if the country does not allow it.

As a combined margin is what we maintain as that's the reason why we call it as Africa because it's sort of interlinked as both the countries. Kenya, I think our company's estimates.

We think of it as a 40 to 50 lakh liter kind of a market that is there in Kenya, in comparison to a Uganda maybe being a 10 to 12 lakh liter kind of a market. That is where we operate as a overall.

Murli will give you the specifics of the Kenyan revenue, Ugandan revenue.

Yeah. Overall revenue, we are at around ₹354 out of that the major revenue LDL is ₹229 crores, and CDL is ₹142 crores.

LDL being Uganda and CDL being Kenya.

CDL being Kenya. There will be some intercompany transactions [unclear].

₹229 crores Uganda, Kenya is around ₹142

crores. Like Murli was saying, ma'am, we will have intercompany, like I said earlier, sometimes we do sell product from Uganda into Kenya also.

The overall turnover as a consolidated after the intercompany, it is ₹354 crores.

This is 9 months, right?

9 months, yes.

9 months.

Sir, just a one follow-up to the first question. Why don't we subscribe to some syndicated data like Nielsen or something of that sort?

Any specific

Most of the data that we have already subscribed, ma'am, is vastly varying from what they give to what we see on the ground. The compatibility is becoming different, because company to company definition of the area itself is becoming very difficult.

Like for me, what Hyderabad city definition is whether the pin code of Hyderabad or some people will say that the geographical area in terms of the Ring Road being verified, and when we compare that to the on-ground reality, the variations are being significant. That is the reason we do get some data, but they're not correlating to what our ground reality says.

We will try to see if and maybe offline if you can help us in recommending anything, we'll also try to see how best we can work for us.

Sure. Sure.

Sir, lastly, just a clarification. Uganda is 2 to 3 200 to 300 bps higher margins versus Kenya, right?

Yes.

All right. Thank you so much.

All the best.

Thank you, ma'am.

Thanks for taking my question. Sir, just wanted revenue and EBITDA for Africa business for current quarter and same quarter last year, if you can share that.

Yeah. Current quarter revenue Africa is ₹133 crores.

Last year same quarter, it is ₹98 crores. There is a ₹34 crores of increase was there, that is almost 35%.

Second, EBITDA current quarter it is ₹17 crores. Last year, it is ₹8 crores.

That is an increase of ₹8.7 crores, overall there is a 105% of increase for the quarter. 9 months period if you see,

Yes, please go

on. ₹31 crores increased to ₹39 crores.

There is a 77% of increase in the EBITDA. Revenue ₹276 crores to ₹354 crores, that is ₹77 crores increase, that is 28% of revenue increase.

Right. As such our margins have actually improved in Africa, whether we look at this quarter or 9 months.

That's right, right?

Yes, sir. Our margins have improved in Africa, sir.

As a percentage, they might be lower because we had a significant growth in volume, but as an absolute number, they've improved.

Okay. Okay.

All right. Thank you.

Yeah. Hi, sir.

My question is, sir so Dodla has always been basically the first mover in taking price hikes, but this time you say that you have not taken price hike to maintain market share. I just wanted to ask what have other players done in the market in terms of price hikes?

Nobody has taken a price hike per se, ma'am, because, like we said, normally we have a surplus in the winter months, and then there's more of a procurement gain. This was a peculiar time when we didn't have anything in the winter months itself, and in the winter months itself, markets are subdued.

I think it will be in another couple of months, once we see how the summers pan out, that there will be the price increases that will have to be passed on to the customer. I think, like we always say, that the impact normally which used to be a quarter, which used to take time to decide where they'd stabilize and pass on, this year it has extended not for 1 quarter, but maybe for a little more than a quarter that it is there.

We'll have to make that call, I think, as the following months come into play and we see how the weather patterns play out.

Okay. Okay.

Thank you. Next question.

I just wanted to know, see almost all of your peers are increasing their VAP shares, and so how do you see that as a competition coming

in? VAP, even our shares have increased, ma'am.

If you look at it minus the bulk sales that we have done, we have grown from 23% to 25%, which is 2%. We keep saying that because the overall pie is larger, that it is difficult to say that more than the 2% growth that we look at.

Also when we look at Orsam that we have added as an acquisition in the consolidated basis, that will bring it down a little more because Orsam and Bihar is only been 13%. I think once we improve that, in the overall we'll show.

I think stand-alone we have grown from 23% to 25% in the VAP compared to last year. In spite of having a bad summer where we didn't sell any of the higher value-added VAP products like lassi, buttermilk, and ice cream, which also came down.

In spite of that, we have grown 2%.

Got it, sir. Thank you so much.

Thank you very much everyone for joining us today on our earning call. We appreciate your interest in Dodla Dairy.

If you have any further queries, please contact SGA, our investor relation advisor. Thank you very much once again.

Have a great day.

Thank you all.