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

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

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

Murali Mohan Raju; and SGA, our Investor Relations advisors. I hope everyone has had an opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchanges and our company's website.

Financial Now coming to the business, financial year FY26 was a year that tested the dairy industry. Milk supplies remained constrained for most of the year.

Procurement cost inflation was sharp, and erratic rainfall affected demand for certain value-added products in some regions. Against that backdrop, Dodla Dairy has delivered resilient performance.

Revenue growth was 11% year-on-year, EBITDA margin stood at 7.5%, and a PAT margin of 6.5%. Notably, the performance is overall on the healthy base of FY25, which was which delivered an exceptional growth of almost 20 years over the previous.

To better understand the trends of the dairy industry, one should look at the 3 to 4-year cycle. On that basis, our 4-year CAGR stands at a healthy level of 16%.

Based on our growth and expansion plans for the next 3 to 4 years, we are confident to maintain or even surpass this CAGR number in the long run. The pressures we faced were industry-wide.

In such tough times, the diversifications which we have built via Africa and Orgafeed played a critical role. Now coming to the quarter performance, during the quarter, we recorded our highest ever revenue growth for the fourth time in a row, with a topline of ₹1,074 crore, reflecting a year-on-year growth of 18%, primarily driven by volume expansion.

EBITDA for the quarter stood at 5.0% 5%, and PAT margins stood at 6.5%. Margins remained under pressure due to elevated milk procurement costs and our calibrated pricing strategy.

An increase in procurement price was not fully passed on to the selling price to maintain the market share. Our pricing strategy is in line with the overall industry.

Going forward, the situation is turning positive. Milk supply is improving, which should result in a normalization of procurement costs.

For milk sales, some price hikes will also be considered. Some trends are already visible, where a few of the northern players have already increased their milk prices.

Our value-added product segment witnessed steady performance during the quarter. Due to operational variability, the overall VAP portfolio could not grow to its full potential.

Once our planned expansion fully stabilizes, our planned expansion dire planned expansion directionally we are confident that the VAP mix will improve further. This growth will be delivered by curd, paneer, and ice cream, and broadly we are targeting closer to 22 to 30 32 to 34% in terms of VAP contribution.

Africa business recorded a revenue of ₹151 crore, reflecting a robust growth of 48% year-on-year driven by more than 60% growth of in liquid milk sales. As a result of continuous increase in the scaling of business along with better operational efficiency, we've achieved our highest ever EBITDA number of ₹18 crore in Africa for the and this is for the quarter the fourth quarter.

The decision that we took 12 years ago to extend our footprint in Africa has now become an important engine for long-term growth for the company. We see Africa scaling towards 15 to 18% of consolidated revenue by FY28, supported by a phase-two expansion in Uganda, which will include pasteurized milk and milk products that will be sold in Uganda.

Orgafeed business delivered a strong revenue growth of 23.2% year-on-year with a slight dip in margin as a factor of higher raw material costs and expansion of our footprint of distribution. This business complements our core dairy operations with the strategic angle.

It helps in strengthening farmer relationships through assured feed supply and creating an important loyalty loop in our procurement network. Oshsam business reported a steady progress, with our focus remaining intact on enhancing operational efficiency in this business to improve profitability.

I also would like to welcome Ms. Dodla Shilpa Reddy, who got appointed by the board as a senior management personnel for Strategy and Transformation.

Shilpa has spent considerable time understanding the business across verticals, and now she's increasingly taking responsibilities of strategic and operational areas. Now speaking about the operation our expansion projects, our Maharashtra project is progressing as per the scheduled timelines and is expected to start commercial operations by the end of FY27.

The work is under progress, and ₹106 crore worth of capex has already been deployed cumulatively across '25 and '26. We've also made decent progress towards improving our operational efficiencies of the Oshsam business, improved its product quality, and upgraded the infrastructure.

We will We should continue in this direction till margins are at par with the overall company-level margins. We were also allocated a 7-acre land parcel by the Bihar Industrial Area Development Authority for a dairy project, which will call for additional investment of around ₹4.4 crore towards the land.

The project is presently under consideration, and further details shall be disclosed after board approval. On the Uganda expansion plan, we acquired 70 acres of land parcel for a greenfield expansion.

Total capex budgeted for this project is currently around ₹60 crore, including land as well as the plant. It will be executed in a phased manner and will be completed by year-end of 2029.

Before I hand over to B.V.K., let me share our directional views for FY27. We expect revenue growth to be in the low to mid-teens, supported by Oshsam's full-year contribution, Africa continuing on its current trajectory, and an 8 to 9% organic growth in our India business.

We are expecting a gradual gross margin recovery of 50 to 100 basis points over FY26 levels as procurement normalizes and our pricing actions take effect. Effective tax rate will return to the normal 25 to 27% range post completion of the favorable tax orders we received in FY26.

On capital allocation, let me articulate to terms clearly. Our priority order is first first fund growth capex, where Maharashtra, Uganda, and our current regular capex are both covered from our internal accruals; second, regular dividends; third, selective bolt-on acquisitions where we see procurement or distribution synergy.

The combination of strong company fundamentals, a clean balance sheet, healthy cash flows, and all of these growth initiatives underpin our commitment towards a disciplined capital allocation and long-term sustainable growth of the company. With this brief, I will now hand over to our CEO of the company, Mr.

B.V.K. Reddy.

Thank you very much.

Thank you, Mr. Sunil Reddy.

I will now walk you through the consolidated performance highlights of our business. During the quarter, despite a shortage of milk in overall industry, our milk procurement level remained stable at 18.5 lakh liters per day, which is an increase of 13.4% on year-on-year basis, underscoring the strength of our procurement network, longstanding farmer relationships.

The average procurement cost in Q4 FY26 stood ₹41 per liter as against ₹38.7 per liter in the previous quarter and ₹37.4 per liter Q4 FY25. However, we did not entirely pass on this increase in cost to the consumers.

Our average milk sales price for the quarter stood ₹58.4 per liter, which was ₹57.7 per liter in the previous quarter. This was primary reason for our margin being under pressure during the quarter.

To give some context, our standalone India EBITDA margin for the quarter reflected sharpest quarter of the procurement cost inflation in this cycle. The consolidated EBITDA margin of 5% was supported meaningfully by Africa and Orgafeed, which together delivered around ₹22 crore EBITDA in Q4.

On 9 9-months basis, our standalone India EBITDA margin was approximately 6 to 7%. In Q4, represented cyclical throw, we expect this figure to recover in Q1 FY27.

We also witnessed some cost pressure in packing and logistics cost, among other things, due to the shift of bulk sales to higher liquid milk and milk product sales. Speaking of Africa, we continue with our growth momentum in the Kenya market.

The business is now seeing the benefits of scale with profitability improving steadily. We continue to price our products competitively to strengthen market presence and remain confident of gradual improvement in margins.

Now coming to our product sales mix, Dodla recorded its highest ever milk sales of 14 lakh liters per day, driven by the continuous efforts of our team towards expanding the geographic reach across India and Africa. Total value-added products stood ₹2,969 million as against ₹2,841 million in Q4 FY25.

Excluding bulk sales, VAP delivered growth of 21% on year-on-year basis. Curd sales volume reported a healthy growth of 15.4% on year-on-year and stood at 442 million metric tons in terms of value.

Curd sales grew by 19.1% on year-on-year basis. Products like curd, paneer, buttermilk, flavored milk, lassi, etc., delivered a decent growth, whereas other products remained muted due to seasonal variance.

Within the Orgafeed business, the revenue growth is healthy, and the utilization levels also are scaling up in a good way. However, rising the raw material input cost have not been fully passed on to the farmers in order to sustain long-term relationship in low milk supply environment, heightened competitively intensity.

Some moderation in the input cost is expected in upcoming quarters, which would improve the profitability of this business. Our pricing strategy in line with overall industry, and we also see an opportunity to increase milk prices in the near terms to pass on some part of elevated procurement cost.

We are also witnessing some moderation in procurement cost as the milk supply in the industry is coming back. Hence, we expect a gradual improvement in the margin going ahead.

With the strong underlying fundamentals and expansion plans in place, we remain focused on effective execution and achieving long-term objectives while delivering profitability growth. Now I would request our CFO, Mr.

Murali Mohan Raju, to share the financial highlights for the quarter. Thank you.

Thank you, Mr. B.V.K.

Reddy, and a very good morning to all the participants on the call. Talking about consolidated financial performance in Q4 FY26, revenue from operation for Q4 FY26 stood at ₹1,074 crore, making its highest ever quarterly revenue, growing 18.1% on a year-on-year basis from ₹910 crore in Q4 FY25.

Gross profit stood at ₹247 crore with a margin of 23%. Employee expenses for the quarter stood at ₹52 crore, up approximately 27% from FY25, primarily reflecting post-inclusion Maharashtra greenfield expansion and the Kenya plant ramp-up.

Other expenses stood at ₹141 crore compared to ₹123 crore in the corresponding quarter last year. While other expenses remained broadly in line with the revenue as a percentage of sales, the increase in absolute terms was primarily driven by increase in infrastructure-related expenses including rent, employee travel, and conveyance cost due to an increase in the head count of the employees; higher transport cost owing to shift in product mix from bulk sales towards liquid milk and VAP.

We reported EBITDA of ₹54 crore for the quarter with an EBITDA margin of 5%. Depreciation expense increased to ₹22 crore during the quarter as against ₹18 crore in the same period last year.

Other income for the quarter stood at ₹20 crore including ₹10 crore of interest income tax refund, pertaining to interest on a tax refund following a favorable ITAT order. In Q4, we recorded an exceptional item, ₹33 crore worth of reversal on the one-time labor code expenses, which was recorded in Q3 FY26.

An exceptional expense of ₹5.7 crore was recognized in the previous quarter pursuant to the revised labor code guidelines. However, the actual impact was lower than initially estimated due to the restructuring of salary components.

Additionally, the company recorded a tax reversal of ₹29.2 crore for the quarter relating to earlier years, following favorable orders received from the ITAT. This tax credit represents the final portion, and accordingly, no further impact shall be reflected from the next quarter onwards.

Net profit for the quarter stood at ₹70 crore with net profit margin of 6.5%. I want to call out the one-off support to Q4 PAT explicitly.

The ₹70 crore reported Q4 PAT includes ₹29 crore earlier tax credit, which I just mentioned, and ₹10 crore of interest income on the related tax refund. Excluding these two one-off items, our Q4 underlying PAT is approximately ₹40 crore.

For the full year, FY26 reported PAT of ₹267 crore includes total one-off benefits of approximately ₹70 crore, that is, ₹58.7 crore of earlier tax credits through the year and ₹10 crore of related interest income. Adjusted FY26 PAT is, therefore, approximately ₹215 crore with an adjusted PAT margin of around 5.2%.

This is the clean baseline against which FY27 should be evaluated. Now coming to FY26 performance, revenue from operations grew by 10.9% year-on-year to the highest ever ₹4,125 crore compared to ₹3,720 crore in the previous year.

Revenue remained over ₹1,000 crore for all the quarters of FY26. Gross profit increased by 3.3% year-on-year to ₹1,055 crore.

EBITDA for the year stood at ₹309 crore with EBITDA margin at 7.5%. The company reported a profit after tax of ₹267 crore, translating into a PAT margin of 6.5%.

The company generated healthy cash flow from operations of ₹295 crore during the year, while total cash and cash equivalent stood at ₹649 crore as of 31st March, 2026. This includes cash and bank plus our current as well as non-current investments, as all of those are liquid in nature.

Our debt to equity remains under control at 0.03 levels. The capital investment done in FY26 is about ₹430 crore.

This includes around ₹271 crore of expansion capex in Sriperumbudur, ₹86 crore in Maharashtra during FY26, taking the cumulative Maharashtra spend across FY25 and FY26 to ₹106 crore against a total project envelope of ₹280 crore, and the balance ₹73 crore of maintenance capex. For FY26, the board has recommended a final dividend of ₹5 per equity share.

With this, we conclude this presentation and open the floor for further discussion.

Hello. Hi.

Thanks for the opportunity. I had a few questions.

The first one was can you give us a sense of what is a steady-state margin that we can expect in this current environment? Because earlier in the call, you had specified 50 to 100 basis points margin improvement from FY26 levels, which would still take you to about 8% at an EBITDA level, 8 or 8.5, which is at the lower end of the earlier margin band which you were referring to.

Are you recognizing a structural lowering of the steady-state margin that you can achieve, or are you saying that FY27 is a year in transition and then onwards, there are factors which can take it upwards? That's my first question.

Thank you very much for the question. I think it's more in terms of being cautious with this whole uncertain environment that we are in, because none of us are able to take sure of what is going to be pricing of fuel, pricing of plastics, the whole agriculture under impact with urea production.

None of this is very clear for us. We're rather be on the cautious side of taking what we can achieve even by considering all the uncertainties that are there.

This is more a '27 year kind of a year where, to know, taking into consideration uncertainties, what is going on. We are trying to give this kind of a guidance.

Just as a side to that, do you see, for example, when you talk about the urea issues, etc., on one hand, it can indirectly impact your feed business. On the other hand, if farmers are constrained on the agricultural side of things, they might focus more on the livestock part and might improve on the dairy procurement side, right?

Could you throw some light on that? No, no,

you're exactly right, right? If there is drought and less of agriculture, then animal husbandry steps in acts as a buffer for the farmers to grow.

Like I said, we're not too sure where that's going to hit, right? Is El Niño actually going to play out and more procurement pricing coming in?

That's the reason we are being more cautious, because, A, you have a weather, which is normally there as an uncertainty, but added to that the uncertainty of the war and the pricing that is coming. Keeping that into consideration, we are being more cautious than being aggressive.

To understand you, you're saying that post FY27, assuming some of these things normalize, you can get back to your more normal kind of

Yeah, we will come back to the normal Yeah. Also one more thing is in these uncertain times, right, we have to be very careful of taking care of both the ends of the chain, that is the farmer and the customer.

If we go and unreasonably try to hit the customer, then the consumption will start taking a dip. If we are unreasonable with the farmer, long-term impact in terms of productivity also will get hit.

Keeping both into consideration is why we are being more cautious than being aggressive.

Understood. On the VAP mix, can you throw some light on what are the steps that you're taking to reduce the seasonality of that?

I think you had already indicated a stable mix you want to get to. If you can throw some light on how do you plan to reduce the seasonality part of it to the extent because a lot of your existing products in the VAP are somewhat seasonal in nature.

So. See, basically,

seasonality impacts three major products for us. One is ice cream, which does not move the needle significantly because it's a smaller portion as the overall.

Buttermilk, lassi, and curd are the ones which majorly go affected with seasonality. That I think will be very in a southern consumption habit that if there is more summer, people shift more towards the fermented product.

We are trying to see that if it becomes a throughout-the-year product. What was exclusively 2 to 3 months, we're trying to extend that to a 6-months period to see that people start using it as a refreshment rather than worrying about it as a summer product.

On the other hand, products like paneer have improved for us. Paneer has seen a significant growth that is coming in the local consumption once placements have increased, and also that we are looking at things like our flavored milk, which is also expanding and growing at a bit of a steady-state growth that we're looking at growing those products.

I think in the days to come, depending on customer habits and health grounds, we will think that even buttermilk and such will become a regular product. Other than that, I think we will not be able to change customer habits dramatically.

Understood. The last question was on Oshsam.

What operational changes incrementally are you driving to converge Oshsam margins to the overall company margins? B.V.K., can you explain in details?

The operational margins that we're looking at Oshsam, see basically broadly it's on all fronts, right? It is on production, it's on market, and it's on procurement.

I think the operational efficiency that you're saying, I'll ask B.V.K. to give you more in detail what all of the operational efficiencies in Oshsam that we have undertaken, which will help us improve our margins.

Yeah. See Oshsam, when we see we have implemented SAP and a lot of infrastructure we have done.

A lot of stress is being put towards quality and a lot of logistics cost, you know. Everything, streamlined.

Since, once we acquired, in a couple of months, it took, maybe in the coming year, we will see further refining and a lot of operational efficiencies in Oshsam.

What kind of time will it take for it to converge, and you're talking about now new land allocation and spending on that for expansion further in Bihar? How does that affect the margin convergence trajectory?

Presently what we're looking at it is the land because the government is offering. That will be for a future project, which will not be immediate.

More like we said, you'll have to go through the board approvals and get it. Existing operations improvement is still what we're looking at.

We'll look at between 6 to 12 months will be that you will see all the improvements getting into effective fully, and then on it will come back to the regular margins as the overall company's perspective.

Thank you.

Thanks.

I'll fall back in queue.

Hi. Thank you for taking my question.

My question is on the cycle. Do you see anything different about this current dairy cycle?

Hi Yash. Yes, what we've seen is as usual when the summers come in, you've seen a significant offtake and volumes increasing in the first quarter.

That is one on the sales side, where we see that significant improvement happening in the product mix, even the better realization over the previous last year the same period. On the other end, procurement is still under stress.

We are seeing improvements happening, and we hope that maybe in another month or so that will also start to improve. I think Maharashtra and Karnataka have improved a bit in terms of productivity.

We are waiting to see how the productivity in Tamil Nadu, Andhra, and Telangana and other places will come and increase. The shift has happened in the proper manner in the sales side.

Procurement is also on track. We hope to see better results coming in in the next month or so.

Okay. Secondly, are cooperators raising their prices in all the regions you're operating in the southern states?

They've increased our selling prices. Amul and Mother Dairy as it's been in the paper have increased the ₹2 selling price.

We have already taken the price increase in the month of March itself. Mid-March itself we've taken the increase.

The cooperators are just following the increase that we have taken to compensate the cost.

Over the next 2 to 3 months, would you be further taking price hikes, and what would that range be in?

We won't be taking price hikes per se, but we will be trying to correct certain things that are there, right? For example, if the packaging material, it will be only minor corrections that we will take, not a major price correction, because already we have a significant headroom over the cooperators that are there.

We will only correct more in the procurement side.

Okay. Lastly, just to confirm, you said that margins will be reverting to mean by FY28, right?

Yes.

Okay. Thank you.

Yes. Hi, sir.

Thank you for the opportunity. Just wanted to check what is the milk procurement cost that you're seeing currently as of today?

What is that level? Also with the pricing that you have taken so far as of today, what part of the cost inflation is currently covered already as of mid-May?

That's what I wanted to check first.

Murali will answer that, Abhishek, but what you are saying is what is the price increase in procurement, and what is the price increase in sales to have compensated the price increase, correct?

Broadly, yes, sir. You gave the number for the procurement cost for the fourth quarter, but what is it today?

The pricing that we have taken so far since we've indicated we are not planning any further major hikes, what part of inflation is covered as of now?

We are at the procurement price in line with whatever the March prices. There is no major increase, okay?

Whatever we provided as a consolidated 37.36 to 40.97, that is a 9.7% of growth was there year-on-year. Is the same thing is continuing.

At the standalone, it is a 9.3%,

okay? To answer your question, I think we have passed on around ₹1 of the inflation in the sales recovery.

That we have already done currently that we're doing. We're anticipating that procurement improves.

We should get on another rupee or so will be coming down in the procurement price.

Great, sir. If I'm hearing correctly, as of mid-May, there is no sequential increase from the number that you gave out on the procurement cost front.

Is that the right understanding to take?

Yes, that's the right understanding. No price reduction, but we are anticipating certain areas of price reduction to come effective in end-May.

All right, sir. Second question is for FY27, if you can indicate what is the capex that we are planning and what will be its break-up?

I think you have given the FY26 to FY28 capex number, but what would be that number for FY27? Also just some bookkeeping numbers, if you can share the consol overall realizations and the VAP realizations for the fourth quarter.

That's it.

Yeah. Murali will give you the number specifically about the capex up to the current year, and then the future capex that we're looking at broadly it will be the highest number we can see coming from Maharashtra or from an Africa business.

I think Murali will give you the specifics in terms of what we're looking at our capex. You wanted the fourth-quarter numbers, right?

For FY26. Yes, sir.

Fourth-quarter numbers.

Yeah. Both of the FY26 fourth-quarter numbers we shall give it to you.

Fourth quarter, what are

the specific years, 20?

Fourth quarter, you want the capex numbers or?

No, sir. I was asking for the capex number for FY27.

For the fourth quarter, I just needed the consol overall realization and the VAP realization.

Yeah. 1 minute.

The fourth quarter consol realize sorry, you wanted realization not capex.

Okay. Overall budget for the FY27 what we are considering.

1

minute, we're just pulling up the numbers.

Sure. Sure.

So ₹65 crore for regular capex what we considered, around ₹33 crore we considered for STPs, and hardware and around ₹7 crore, and overall standalone, we are expecting around ₹120 crore of capex. Q4 Yeah, that's what we are projecting, Abhishek.

Without considering the Maharashtra project, which is

Maharashtra, out of ₹280 crore, ₹20 crore we spent in FY25, ₹85 ₹86 crore we spend in FY26, and balance ₹100 crore ₹180 crore are planned to spend in FY27.

Those will be the broad areas of capex that will be spending.

Right, sir. The realizations, sir?

For the fourth quarter realization for consolidated, I'll just give

it. Consolidation realization will be 61.19, okay?

That is the overall sales realization of the including the product mix. If you exclude

You want also the procurement price for fourth quarter, Abhishek?

No, sir. Just needed the consol realization and the VAP realization for the fourth quarter.

Okay. For the milk procurement, we'll talk about revenue liquid consolidated sales only.

Sales only. It is 55.16 of last year Q4 to this year it is 56.16.

When you talk about specifically of India, 56.05 to 56 56.15 to 58.25. That is 2.10 increase in the milk sales realization especially without the considering the VAP.

VAP it is a blended. I could tell you the blended price.

That will be at a standalone it is 60.72 60.89 to it is reduced to 60.54 because the product mix was changed. Because of bulk sales we are exited, so that's why there is a reduction it shows when you take a consolidated number.

Sorry, the VAP consol realization was what, sir?

60.54.

Great. That's it from me.

Thanks and all the best, sir.

Yeah. Hi, sir.

Thanks for the opportunity. Sir, just wanted to understand what kind of price inflation we are seeing in our packaging and freight cost.

Is it manageable now or it's going through the roof? How are we looking to mitigate the same?

I think packaging material as a number has gone up by 30%. Most of the plastics that are there and we use a lot of the plastic has gone up by 30%.

That the small corrections is what we have passed on to the consumers in terms of the price corrections that we have taken. We are anticipating that the plastic prices will remain at the current elevated levels only because there was being some government support that came in in the middle in terms of excise duty reduction and such.

Unless something dramatic happens, we're thinking that it will hold fort at the current 30% increase over the previous year.

Sir, now with increasing petrol cost, how are we looking at our freight cost going forward?

The current ₹3 I think temporarily for a month or so, we will have to look at it and we will observe because a portion of it will be passed on to the transporters itself because we take price corrections only periodically and we normally try to keep it for that period. If it remains at three, so that's the whole reason which we are saying there is certain uncertainty of time.

We don't know whether it's going to remain at three. Is it going to go up to six or seven?

That's the reason we'll wait and watch I think for another at least fortnight or a month before we decide how to take it forward in terms of pricing.

Understood, sir. Sir, in such an inflationary scenario, is price hike the only solution for us or there is an option for grammage reduction also in our kind of industry?

Grammage reduction, which we normally used to do, we will not do much this time because that is not helping in terms of the consumers are also able to realize what is happening as grammage reduction towards price. I think it is going to be a blend today that we're going to do in terms of muting up procurement, operational efficiency, and marginal increase in pricing.

It will be a blend of all the three. For us, the way I look at it is we need to cover cost and to improve margins maybe we need to increase by a rupee or so more in terms of pricing.

If we are able to manage 30, 40 paise overall in procurement, 20, 30 paise operationally, and 20, 30 paise in terms of the front end, we should be able to improve our margin. Also because overall our volume growth is there, percentage might be a little on the lower side, but the absolute number will be higher because the volumes in the first quarter seem to be pretty reasonable in terms of the size of the sales that we're getting.

Understood, sir. Also, there is expectation of intense summer this season and El Niño.

Now in such a scenario, while we would be positively benefited because of higher VAP sales, but on the flip side, the milk yield might also take a hit, which would impact the procurement costs also. With the milk inventory in the system pretty low, how do we see both of these things intermingling with each other and our impact on margins going forward?

What would be the factors, things we would look at going forward which would give you the confidence of improving margin outlook for the company? See,

broadly like you said, the fluctuations will not be dramatic. If there is a severe drought, it's a two-way sword for us.

Certain areas where there is a drought, animal husbandry improves because there is no other income for the farmers. They concentrate more on animal husbandry and therefore production normally improves.

Also the sales mix if it continues to be high on the value-added product side because of higher summers, that is more curd, more buttermilk, and lassi that goes off. Our average realization increases because of the product mix change.

It sort of helps us in a manner of speaking to keep our cost going. That is what we said, but we're more worried about the other costs that are going to shoot up dramatically more than the price of milk itself, right?

We are not none of us are certain about where is this price of fuel will be stopped, because if you look at it and people and this is my view, and please correct me if I'm wrong, $60 to $120 in my simple mathematics for barrel means it's a 100% price increase. If you translate even to a 25 or a 30% increase for us on fuel, which is not yet shown, we're not sure whether it's going to go up by 20% of fuel or only going to remain at the current levels.

I think once we get more of a certain clarity on this, we can think of where all we're going to pass on, how much to the customer, how much from the farmer, and how much in terms of operational efficiency.

Understood, sir. Got it.

Now, sir, try to understand when I look at the liquid milk sales volume excluding Oshsam, we have been growing at more than 9%. Sir, just wanted to understand what would be the growth in India specifically because Africa would be the major part driving growth.

Just wanted to understand what is the liquid milk sales volume growth in India for the last 2-3 quarters.

We will continue to grow with that volume terms at 11 to 5 5 to 6% in terms of liquid milk. Although in the current year, we did excluding bulk, we did including value-added we did 9.4% of growth.

We think that we will continue to maintain an average growth in terms of including value-added to that 10% of volume growth.

No, what I wanted to understand was we did not increase the milk prices because in the presentation, you mentioned that you wanted to gain market share. In the last 2-3 quarters, has our liquid milk sales volume growth seen an uptick?

Liquid milk volume have seen an uptick, yes, and all. Value-added we are pushing more.

That has seen a significant uptick. Liquid milk has seen an uptick of around 5% to 6%, whereas value-added has grown up by 16%.

Understood. Understood.

Now, sir, what is the Oshsam revenue and EBITDA for this quarter?

For the fourth quarter of this year?

Q4 EBITDA is basically ₹2.7 crore and overall that was about EBITDA. I'll talk about even revenue also.

For the Q4, the revenue is ₹81.9 crore, EBITDA of ₹2.7 crore. Full year, it is a ₹214.7 crore and EBITDA is ₹4.8 crore.

Okay. What's the gross margins that Oshsam did?

Gross margins of Oshsam would be around 21%.

21.4%. Okay.

Okay. This

should soon be 25% soon.

It can soon be 25%, sir?

It should move up to the 25% soon.

This would be majorly due to price hike and improvement in VAP mix?

Price hikes, improvement in VAP mix, and also the efficiencies that we were talking about increasing our own procurement, bringing down freight costs, cutting down on losses and all that put together.

Understood. Understood.

Sir, just last one question. Now in Orgafeed, we have seen a drop in margins, but what I understand that there has been a reduction in maize prices, and margins should actually have improved.

What is the reason for the drop in margins in Orgafeed? Basically

although maize prices what I say that have reduced now, it will only be what we buy now will be used later. I think the maize prices overall did go up and not come down.

That is number one. Number two, earlier days they were when you're operating in a closer proximity of our area, we had the advantage of other operating costs like freight.

Now since we're expanding our volume and expanding into other areas, we have impact on freight, and we have to be also competitive with the local producers. For example, if I'm selling my cattle feed to sell in Maharashtra, the transport cost from selling from Koppal to Maharashtra will add on the margin pressure, and the pricing in Maharashtra in terms of the local competition will be there.

We're still maintaining that 11% margins that we are, and we think we'll continue to maintain that kind of margins.

Fine. Thanks, sir, for answering questions.

I'll join back in the queue.

Thank you.

Yeah. Hi.

Am I audible?

Yes, sir.

My first question was on the butter prices. Last few quarters due to elevated butter prices is one of the reasons why the milk procurement price being higher.

What is the latest on the global butter prices and global SMP prices? Why were they elevated [steeply?]

?

Butter prices and powder prices are elevated because like you said, last year was a low productivity in terms of milk availability coming down, and therefore the stocks have been depleted. Only now in terms of this volume, stocks will be built up.

That is the reason why we have removed our bulk sales and not done bulk sales because we don't have the extra butter that we produce. We have sort of compensated it by increasing our milk procurement that we have.

Getting SMP we did turn out to be a small amount of a net buyer, and that is the reason why the whole market the prices are elevated.

No, sir. My question was more on the global butter and SMP prices, not really India specific, because we saw a lot of exports happening.

Yeah. Global prices also is a similar manner.

Now they're looking at it as an oversupply, and India's export of butter is not much. It's mostly ghee that will export in terms of fat for the Indian diaspora, which is there.

That is what consumes more of the fat exports that India has. Uh-huh.

Right now we are seeing these prices coming down, the export prices for butter and SMP?

No, not coming down. They're maintaining the same state as whatever earlier.

We are not much into exports, I don't have the specific numbers, but I don't think they're coming down.

That's not a risk to our thesis that the milk procurement prices would start coming down. We do not expect that elevated global butter and SMP prices would be a risk?

Not much, because I think the number of exports that we see out of the country is not that significant to change pricing patterns. As much as also imports are very restricted because we have duty structures so that we don't get the flood of imports coming in.

It will broadly be dependent on domestic consumption and production, not much of variation due to exports.

Then my last question is on the cost mix. If I were to look at our cost of goods sold for India business especially.

What would be the mix of that? How much would be milk as a percentage of that cost?

How much would be packaging material? What about logistics if you can give that?

Sir, second bit would be on the Maharashtra side. I think we have the capacity to 2.5 LLPD already in Maharashtra, but we don't have any bulk sales as of this quarter.

Where is this really going in terms of sales?

Can you hear me now? Hello.

Sorry, everyone, for the disconnection. Now Murali will give the breakup of the cost that you had asked for earlier.

Yes, sir.

Overall the consolidated to be the breakup for the full year, it is a 74% 4% is includes the packaging material, and employee benefit expenses is around 4.9%, and transport cost is 7.3%, power and fuel is around 1.5%, consumption of stores is 1%, and balance all other miscellaneous expenses are towards legal, traveling, rent, security, all this put together. Overall the other expenses is coming to 13.2% excluding employee benefit expenses.

That is a 18.1%. Okay.

Sir, and raw material [mix?] ?

Out of that 74.4%, 3.5% is a packaging material.

Sorry, how much?

3.5%.

Is the packing expense. What about logistics expense in this?

Logistics expense 7.3%.

Remaining else is all milk?

74% out of that only packaging material is 3.5 out of the 74, plus 7.3% transport. And 64

around 64 would be milk.

Yes. In a

74.4% transport is not excluded. 74.4 plus transport 7.3 you have to add for the transport Inward

and outward.

Yeah. For us transport includes the four legs, that is a village to the chilling center, chilling center to the plant, plant to the sales office, sales office to the customer.

All the transports are included apart from the loading and unloading charges, the freight carry forward thing, and the contract labor who are works under the transport of that.

All that put together comes to 7.3%. It doesn't come in the 74 of raw material.

74 of raw material includes 3.5% of packing material.

Remaining is all milk, right? 74 minus 3.5.

Yeah. Understood.

Power and fuel would be

Hello. Hi, Sunil.

Hi, Murali. I just wanted to know how are you thinking of the risk of El Niño on your gross margins?

I think earlier in the call you referred to a 50 to 100 basis points improvement in your gross margins. How are you thinking of that?

Basically we are very confident that milk procurement should come back normally. It cannot be there, and the prices will drop in milk procurement.

That itself should give us that difference in our margins. Because if you look at it as what we're saying as 1% or 100 bps of price margins, as you see our average realizations are around ₹60, you're looking at a 60 paise correction that we

expect. That's fair.

Thank you. My second question is a little more broad.

Your Africa business seems to be doing strong and growing a lot. What is going right there, and how do you see that continuing into the future?

I think what is going right is basically Uganda we have become a significantly large player, and in Kenya, we are just beginning to see that. Kenya is a much larger market than Uganda.

Earlier, we used to cater from Uganda to Kenya, and due to the border disputes, we were not able to cater to it properly because there would be restrictions on how much we could send. Once we have now entered in Kenya with our own operations and our own plant and having a stability of the product, we are able to do better.

I think in terms of comparison, like we said, it's more keeping your improved quality, making sure that operational efficiencies are maintained, and we are still a smaller market share in Kenya, and that gives us growth opportunities. Like we said in Uganda we are expanding.

Earlier we were into long-life products only. Now we are entering into the pasteurized and other milk products.

Okay. Perfect.

Thank you.

Hello. Am I audible?

Yes,

Yeah. Hi.

Thanks for the opportunity. I just wanted curd sales in rupee terms for this quarter, Q4.

The curd sales Q4 in rupee terms. Right, Darshan?

Yes.

Consolidated curd sales for the Q4 in rupee terms, ₹230 crore. For the full year, it is ₹845.7 crore.

All right. Secondly, just wanted to understand is there any considerable difference between procurement costs and realizations between domestic overall business and Oshsam?

If you were to just see a broader trend, do they move in tandem or are there certain gaps between the trends?

Okay. I was not able to get the question clearly, Darshan.

What you're saying is the difference between Oshsam price realization and the rest of India price realization, am I correct?

Yes.

Actually Oshsam has a better realization than this is the VAP portion than here. Murali will give you the specific numbers.

Throughout Dodla Dairy India basically the milk realization is around 58.1. Whereas HR Foods, that is Oshsam, it is 55.7.

VAP excluding the fat product, it is 64.2 for the Dodla Dairy, whereas for HR Foods, it is 98.8.

Okay. Got it.

All right. I'll get back in the queue.

Thank you.

Hello, sir. Thank you for the opportunity.

Congrats on good top line growth. My questions are on the margin profile of the company.

Sir, if you can explain as to how you will get to the 100 to 50 bps margin expansion that you are talking about in EBITDA for FY27, given that procurement costs are still elevated at the March levels, freight costs are up, employee and other expenses are also the costs are up by anywhere around 15 to 20%. If you can explain firstly, the gross margin trajectory that we should start looking at from Q1 and then the below gross margin line items that is under your control, employee and other expenses as well.

I would like to hear your strategy on that.

You're right, Deepak. Basically the employment expenses this year we actually brought it down in terms of the existing operational by only 5%, 6% increase, but the overall impact is still at 11% because of the new wage code impact that is there.

All these costs including packaging that you're looking at and all that would have taken up our cost by maybe a rupee, rupee and a half. We are expecting that the procurement prices should come down to that ₹1.5 to ₹2, and because of the product mix improvement, our realization is on the higher side.

As a combination of these two, that like I explained earlier, our 100% 1% increase represents roughly a ₹1, ₹1.5 of overall efficiency that we need to build up, which we think will come in the following quarters because normally price will come down at not come down for ₹1.50. It will come down as productivity increases.

Okay. If I hear you right, are there any structural circumstances which occur in the March the May month or the June month which would lead to this price reduction and I don't understand as to why

Yeah,

because of

Maharashtra, Karnataka have got a significant upward growth in the milk procurement, you will start seeing Maharashtra prices sort of correcting a little bit because of the growth that is coming in. Similarly, when the seasons of the rest of the operations come in, you will see a drop.

Sure, sir. Sir, next thing I wanted to understand on the price hikes, your strategy on not taking more price hikes when you have the opportunity as the cooperators are also taking.

I just wanted to understand your mindset on taking more price hikes maybe you're not taking it right now. Will you take it later in the future?

I just wanted to understand on the pricing action from the company. Because

we have basically taken a price hike in March, which the cooperators have only followed later now in May. The next round will be, as I said, the uncertainty of the fuel prices, packaging material, and all that has to settle down.

Once we see what the impact of that is going to be in terms of sort of a stable state, then other price hikes will again come in from all of us.

It's only now that

the difference in terms of us and the cooperators are significantly higher. We don't want to keep expanding that more and more.

Okay. Lastly, on the volume growth for both the liquid milk and VAP, you mentioned that VAP had some operational challenges.

If you can allude to what operational challenge and secondly, what kind of growth have you seen to the season which has started in April, if you can call out that. Any improvements that you've seen in the growth rates for milk, sir?

Yes, our milk growth rates have maintained around that 4.5%, 5% even in the current scenario. We've seen significant increase in the VAP growth.

Like we normally say that for summers of VAP will be higher, our VAP rates have been VAP growth rates have been significantly higher. We're are around 16%, 17% VAP growth.

Okay. Sir, if you can Operator:

Yeah. Hi.

Am I audible?

Yes, sir.

Yeah. My first question is regarding the impact of an increase in fuel price by ₹1 on the logistics cost.

Basically when you look at fuel prices, the ₹3 increase currently will have an impact for us on maybe not as that much. In terms of 0.5% is what the impact would be.

That as I said, if we delay giving it to our transporters, normally they take a hit for a 15-day process and then we go in. Currently it will only be a small hit of 0.25% that we look at.

Once we are sure of what the fuel prices are going to be stable at, then we can make a call of how to pass it on.

Okay. My second question is regarding the Africa business and what can be the sustainable growth number to look for there?

Sustainable growth numbers in terms of volume, we're confident of maintaining the 20% kind of growth numbers in the current year.

Okay.

Actually, I wanted to know the value as well in terms of the sustainable growth.

In terms of value, you mean, sir?

Basically, the last year we done around ₹500 crore. On that, what Sir is talking about

20%.

20%.

₹600 crore.

Okay. It will be the adding number.

Got it. Yeah.

Okay. That answers my question.

Thank you.

Thank you for taking my question. Sir, regarding the Africa sales, can you split it between Uganda and Kenya for F25 and F26, please?

Uganda and Kenya break-up for '25 and '26 is it? 1 minute.

B.V.K. will answer that.

Uganda is almost stable 1.45 to 1.5 lakh. See now if you see last year we've done in all FY25, 180 1,80,000.

Out of that, 1,45,000 from Uganda and balance 30,000 from 35,000 from Kenya. FY26, the similar number, from Uganda we have done 145 150, and the total number what we have done average it is 227 2,27,000.

So 227, 150,000 minus balance 87 90,000 liters average we have done in Kenya

FY26. Okay.

Yes. FY26 volume growth has largely come from the Kenya piece.

Yes. Yes.

Okay.

Sir, if you can give the Africa EBITDA numbers. We have the revenue numbers, but FY25, '26, and Q4 FY25, Africa EBITDA?

EBITDA number Yeah. 1 minute.

Just EBITDA number, in '25, it was 11% EBITDA. The '26 is 11.3% EBITDA.

Okay. Sir, the last question I have is on the Maharashtra plant.

Where are we on the procurement in Maharashtra in terms of lakh liters per day, and do we see it going to 5 lakhs till end of '27?

Right now, the average procurement in Maharashtra what we are procuring is 3 lakhs average right now,

3 lakhs.

Last couple of months average. Once season comes, by end of this year, we are targeting, minimum 5 lakhs.

Yes, sir. Thank you for taking my question.

Thank you.

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, our Investor Relations advisors. Thank you very much.