Good morning, everyone, and welcome to the Q1 FY 2027 earnings conference call of Milky Mist Dairy Food Limited. Today, we have with us Mr.

T. Sathish Kumar, Chairman and Managing Director; Dr.

K. Rathnam, Whole-Time Director and CEO; Mr.

Biswajit Mishra, Chief Financial Officer. We will begin with the opening remarks from the management, followed by a Q&A session.

Please note that this call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict.

I now hand over the conference to Dr. K.

Rathnam, Whole-Time Director and CEO, for his opening remarks. Thank you, and over to you, sir.

Thanks Devika. Good morning to everyone, and thank you all for joining us today.

A warm welcome to all of you, and thanks for joining our maiden earnings call after the listing. On this call, we are joined by Mr.

Sathish Kumar, the Chairman and Managing Director of Milky Mist, Mr. Biswajit Mishra, the Chief Financial Officer, and Adfactors PR, our investor relations relations consultants.

The results and the presentations are uploaded on the stock exchange and the company website. I hope everyone had a chance to look at them.

First and foremost, I would like to take this opportunity to express my sincere gratitude to all our shareholders for the trust and faith they have placed on us. A warm welcome to our new shareholders to the Milky Mist family, and thanks all our stakeholders such as our employees, customers, business partners, bankers, and legal advisors whose continued support and contribution were instrumental in making our journey for the successful listing and thereof.

As this is our first earnings call, I would like to take a step back and introduce Milky Mist brand, who we are, and what we do. I'm sure you must have gone through the the website, the presentations which we uploaded.

Nevertheless, I would like to brief about our company. Milky Mist was one of the first private companies in India, the first one to launch branded packaged paneer way back in 1997 and 1998, when when when everybody was marketing loose paneer at that point of time.

Built around paneer, other product based basic products such as ghee and butter, we were pioneer in launching bucket curd in 1 kg format in in in and around 200 2009 and '10. Over a period of time, since starting our paneer in 1997-1998 and building around the basic product portfolio, we went into a major expansion of setting up of the greenfield project, which came into fully operational 2019.

Between 2019 and now, okay, we had a kind of a a capacity building up of our all the the the product manufacturing lines, product expansions, and product categories, end-to-end establishing end-to-end logistics, and a strong market expansion across the country. What we started as a single product idea has grown today into a diversified value-added dairy and packaged food company with 22-plus product categories having more than 650 SKUs as of June 30th, 2026.

We position Milky Mist as a value-added FMCG company built around a diverse portfolio of consumer-focused food products supported by a strong distribution network with continuous innovation and a track a track record of a strong financial performance. When we talk about the product portfolio, at Milky Mist, we have built a very diversified value-added FMCG portfolio.

Our business is defined by different product categories and value addition to our product portfolio, a very focused consumer-centric approach, and our ability to build brands and scale across markets. This focused approach has been central to the growth and profitability we are delivering today, and will continue to focus on: one, our product portfolio centers to caters to all age groups of consumers, meeting their requirements from breakfast to dinner table.

We market our products under our flagship brand name Milky Mist, and some sub-brands including Smart Chef, Capella, Briyas, and Asal. We have five different segments to cater to the needs of the consumers.

We have we have created at the foundation are the basic needs of the products for of the consumers like such as paneer, butter, curd, ghee, and yogurt, and UHT, sorry, and UHT milk, which anchor everyday household consumption and drive volume and brand recall. The second category of the products which we built around is the indulgence products, includes cheese, sweetened condensed milk, cream, and khova to name a few.

We have a impulse buying range or on-the-go products category that comprises of yogurts of protein in nature and regular consumption, milkshakes, lassi, buttermilk, and chocolates. Our portfolio further extends to after-meal products to have to get a kind of a pleasure and satisfaction, those products such as ice creams, gulab jamun, mishti doi, and shrikhand.

Finally, we have a category for our healthy choices segment such as high-protein paneer, high-protein natural cheddar cheese, Greek yogurt, and skyr. It's one of the fastest growing categories in our product offering.

Through our wide range of product portfolio, revenue is not limited to a single product category, but diversified across occasions and the price points. When we talk about our manufacturing logistics and distribution strength, our greenfield product plant at Perundurai manufacturing facility in Erode, Tamil Nadu, is dedicated to all type of value-added dairy and food products, such as, as I explained previously, including frozen, RTE, and RTC products.

When we talk about the sourcing of milk, we source entire quantity of milk directly from the farmers, and their payments are also directly into their bank accounts. Our strategically located Perundurai manufacturing facility capitalizes on the region's robust dairy farming community to ensure a consistent supply of high-quality raw milk.

Further, South India is less affected by seasonal variation, like we have only two seasons, winter, sorry, summer and monsoon, nothing else other than that, as compared to other parts of the country. Geographical seasonal advantages, coupled with our milk balancing system, enables us to efficiently manufacture fluctuations in our milk supply and demand switch situations.

With regard to logistics, we manage our own logistics to ensure that our diverse product range, which require a chilled, ambient, and frozen conditions, maintain its quality from procurement of raw materials, that is milk, to the point of sale of our products, that is our distributors and the retail touch points. Company-owned logistics, we have about 375 vehicles with, as I said, both chilled, ambient, and frozen, all all categories.

Infrastructure further helps us to reduce the transportation Today, Milky Mist has established a very strong pan-India presence. Our presence across 22 states and 5 Union Territories supported by 4,200-plus distributors with 375 primary transporting vehicles and more than 600 vehicles for the secondary transportation of our products, with closer to 4 lakh retail touch points on daily basis.

Further strengthening is through a network of 4,000 41,000-plus visi coolers and freezers. I may mention here that we are one of the pioneer company in introducing the cold chain facilities at the retail point way back in 2009 of preserving the products till the product reaches to its consumer hands.

That is the point where we introduced visi coolers, and we continue to build that market infrastructure. Today, we have more than 41,000 visi coolers, ice cream freezers, and chocolate coolers across the retail touch points in India.

We have a a greater industry opportunities coming in that industry opportunity. The India's value-added dairy products market, comprising products such as curd, lassi, butter, ghee, paneer, cheese, yogurt, milkshakes, etc., and ice creams including, was valued at approximately ₹5.5 trillion in fiscal 2025, and is expected to grow nearly 9.9 trillion, I would say 10 trillion, by 2030.

This growth This is This is I'm talking about only the value-added products segment, excluding milk. This growth is being driven by rising disposable incomes, rural prosperity, greater health consciousness, and a clear consumer shift towards premium, protein-rich, and convenient dairy as well as food options.

With Within this, paneer is expected to grow to approximately 20.6% by fiscal 2030, making it the fastest-growing segment in the category. The organized market paneer market alone is projected to grow from roughly ₹40.6 billion in fiscal 2025 to approximately 102 billion by fiscal 2030, a CAGR of 20%-plus.

This structural shift in consumer preference is creating a large and sustainable opportunity for Milky Mist. We intend to harness this sizeable opportunity with a few of our key strengths, which include: strengthen our leadership position in South, while accelerating our presence strong presence across newer geographies; continuously expand capacity and procurement capabilities at our Perundurai facility, including addition of addition of new whey protein concentrate manufacturing unit, capacity expansion in yogurts and cream cheeses, as well as the new plant manufacturing lines on natural cheeses; strengthen our brand visibility through increased advertisement advertisement, influencer partnerships, and performance marketing; a pursue a disciplined inorganic growth, building on our recent Asal and Briyas acquisitions, to have a meaningful contribution from the new product categories; leverage our technology, IoT-enabled logistics, data analyst analytics, and automation to continuously improve our cost and achieve operational efficiency; further expand our retail footprint through visi coolers, ice cream freezers, and chocolate coolers, we plan to deploy more than 50,000 visi coolers, ice cream freezers, and chocolates coolers over the next three fiscal years, as we indicated earlier.

With this context, let me turn to our performance for the Q1 for first quarter of fiscal 2027. We have started FY 2027 on a very, very strong note.

Our revenue for quarter grew by 44% on a year-on-year basis to ₹973.45 crore. Our performance during the quarter was supported by strong demand and healthy sales across our entire product portfolio and across the markets.

I would like to highlight the performance across our key categories for Q1 FY 2027. Paneer remained our largest contributor with both volumes and revenue growing by 30% 34%, taking the revenue to 248.29 crore from paneer alone, which contributes about 26% 27% of the top line.

Cheese and curd also delivered a very strong growth with revenue increasing by 38% in cheese and 27% in curd. Ice cream delivered particularly a very, very strong growth because of the season as well as our brand equity, with volumes that grow by 45% and revenue by 60% on a year-on-year basis, which is one of the promising and fast-growing category as far as Milky Mist is concerned.

Yogurt was another stand standout performer. When I say yogurt, it is the yogurt of fruit fruit yogurt of basic nature, the protein categories such as Greek yogurt and skyr, with the revenue growing by 153% quarter-on-quarter basis to ₹84.5 crore coming only from yogurt category, reflecting a continued strength of this category.

This is again another strongest category which will contribute to the top line as well as bottom line of the company. Overall, the broad-based performance across our product portfolio reflects the strength of our products categories and the increasing consumer acceptance of our offerings as well as product categories.

In Q1 FY 2027, sales in South continued to lead, a growth coming from all trade channels with higher growth coming from e-comms and followed by modern trade and general trade. Equal growth also coming from non-South non-South areas, that is West, North, and East.

Moving to gross profitability, in Q1 FY 2027, our gross profit was 332 crore, translating into a margin of 34.2%. This margin expansion in gross profit was nearly 270 bps, which was primarily driven by our strong, product mix, pricing ability, and sales, okay, and the volume of scale.

EBITDA for the quarter stood at 144.89 crore, translating to an EBITDA margin of 14.9%, an outcome of operational efficiencies from 13.7 in the FY 2027. Profit of FY, sorry, FY 2026.

Profit after tax for the quarter was at ₹64.67 crore, translating into a PAT margin of 6.6%. Moving further, we commissioned our new cheddar cheese plant into operation into operation in Q1 FY 2027 with an installed capacity to produce 120 metric tons of natural cheddar cheese per day.

This capacity addition is an important step in strengthening our natural cheese category, giving us significant headroom to scale production in line with the growing demand for natural cheese category as well as the processed cheese. Our focus remains on building a stronger and more efficient and scalable business.

We will continue to invest in our capabilities, strengthen our portfolio, deepen our distribution, and build brands that are relevant to today's evolving consumers. At the same time, we remain committed to disciplined execution, improving operational efficiencies, and maintaining a very strong focus on profitable growth.

As we begin this new chapter as a listed company, we see a significant runway for growth ahead of us. Our priorities are very clear: strengthen and improve our leadership position in our existing markets and in the newer markets as well; build a broader pan-India presence; expand our value-added FMCG portfolio; and create Milky Mist as household brand of India with every household consuming Milky Mist paneer, that's our objective and goal going forward.

We will pursue this journey with ambition, but also with a discipline and a clear focus on delivering sustainable financial performance. We are confident in the opportunity ahead and in the capabilities we have built to capture it.

More importantly, we remain committed to creating long-term value for our customers, employers employees, partners, and shareholders. We thank you for your trust and support, and look forward to sharing this journey and our progress with you in the quarters ahead.

Now with this, I open the floor for Q&A.

Thank you for letting me ask the question. Many congratulations, Mr.

Rathnam and Sathish-ji, for fantastic set of numbers. My first question is on your procurement strategy.

If I look at the RHPs, procurement from third-party operators was virtually zero, say three, four years back, and now is closer to 15%. Can you elaborate more on the third-party procurement strategy?

How is it? Is it margin accretive, and how should one see that?

That's my first question. See,

thanks for the question. Our endeavor and our objective is to procure directly from the farmers, which we have been continuing over the last many years.

However, a couple of years back, one of the private equity-owned entity, which is known as Innoterra, and their offshoot in India in Tamil Nadu is MilkLane. They set up kind of a procurement activities in Tamil Nadu to procure a good quality milk and sell it at a premium to the players in the sector.

While doing so, liquid milk procurement and selling is always based on the demand and supply. They were in a difficult situations post-COVID, and they came to us whether we would be in a position to take over the operations.

That's when we explored, and we said that given a choice, we will go ahead with a long-term contract with them and on an exclusive basis. That's the reason we have included that private equity-owned entity.

In fact, they're also like us, they have been collecting milk directly from the farmers. We have been monitoring their operations day in and day out.

Their payment system also like ours, that directly into their bank accounts. There is no aggregators pouring any milk into the third party.

It is an extension of our procurement activity going forward also. This, since it's a long-term contract of five years, their volumes will contribute some of our product categories which require a very good, high-quality milk such as yogurts and UHT milk.

There are no financial implications because, in fact, we pay to our farmers based on the quality, a little bit of a premium towards the bacteriological superior milk. Similar kind of setup is also being extended to this third-party provider.

Nothing else. Our focus would remain with the procurement directly from the farmers.

Got it.

Thank you.

Thanks for it. Second was on the analog paneer.

Recently we are hearing a lot of concerns around that across states. Have you started to see any incremental benefits and shift towards organized paneer makers like you, because it's one of the largest category for us.

How are you seeing those trends evolving? Thank you.

See,

in Q1, our paneer volume growth has been 34%, okay, volume growth and sales growth, okay? Now that has come on two accounts.

Number one, the GST on paneer has become zero in September last year. With that, the pricing difference between the organized and unorganized players has become almost nil.

That also gave Milky Mist a very strong growth momentum as far as paneer is concerned. Second thing, we have been talking on various forums and also with authorities for stopping of this analog products particularly.

Thanks to FSSAI and some of the key states which have banned analog paneer, which now we see a lot of volume offtake as far as our paneer is concerned. Going forward also, we see a very strong growth coming from paneer.

This would also help not only the companies like Milky Mist, because we are the largest manufacturer of paneer, but also it will help the consumers to have a better product rather than having an analog type of products.

Got it. Thanks a lot, and wish you all the best.

Thank you.

Thank you. Thanks.

Thanks, and congrats. My first question is on the QSR recovery.

We have seen multiple players call out QSR recovery in Q1. Generally in consumption, if any trend reverses after few quarters or few years, it continues for one year.

I wanted to understand from a cheese revenue growth, do you think this kind of a strong number should continue? If you can tell us in terms of B2B supply, is cheese also a strong component and are you supplying to a lot of the QSR players?

That is my first question.

Thanks, Abneesh, for that question. Let me make one thing very clear to you that our B2B sales is only whey powder, which is coming out from cheese and paneer manufacturing.

Other than that, we don't have any B2B sales. We don't supply to QSRs.

We don't know whether that sector is coming back or not. We have established a very, very strong retail network, GT, general trade, modern trade, and quick-comms, so that our entire cheese sales and the growth has been coming from this sector and not from the QSR.

Rest assured, and we will continue to have a similar growth going forward also. Apart from that, when analog paneer is banned, and the next extension is going to be analog cheese.

That also will help us to maintain the growth momentum what we have now going forward also.

One follow-up here. As of now, no plans to supply to the QSR, given it's coming back in terms of growth?

It could be an opportunity. As of now, no plans, right?

No, because see we continuously focus on retail segment, okay? That's our key strength.

We would continue to continuously focus on general trade, modern trade, and quick-comms, and also HoReCa segment, okay. That's our focus, okay.

If an opportunity comes to supply to QSRs, we will explore. Otherwise, our focus and objective is mainly towards this one.

Sure. My second and last question is, paneer has done quite well and a very large category for you.

If I see, you are one of the few players who is segmenting that category into high-protein paneer and normal protein. If you can elaborate if that can continue as a sustainable strategy, because Indian customer clearly very value-focused.

Will your high-protein paneer in terms of the ROI from the customer, because he's paying more, he's getting a bit more protein, but long-term do you see that this can continue to remain a very sustainable strategy to have both paneer and high-protein paneer also?

See, we introduced a high-protein paneer some time back, and that has been growing steadily, and there's a good demand coming for this particular category of high-protein paneer. Abneesh, if you look at it, what are the options available for the vegetarians to have a good quality protein in their meal?

It's only nothing but milk and paneer, right? Okay.

The paneer will remain and will continue to grow like that has been growing since last many years, and being our star product of the company Milky Mist, our focus is to grow this in leaps and bounds. We'll continue to grow in this category.

That's number one. Number two, India is a protein-deficit country if you look at it.

The protein requirement is very less. We take about 50 50% of the protein what we require, and beyond that we are not consuming.

Paneer becomes one of the basic ingredient or basic part of the Indian diet, and particularly more so in South India, because we have a large number of population being a vegetarians.

Thank you. That's all from my side.

Thank you.

Thank you. Thanks.

Hi, good morning, everyone. Congratulations on a very good set of numbers, and thanks for taking my question.

Sir, first question is on gross margin. I understand you have explained it in the press release, but most dairy companies have reported sharp margin contraction in gross margin terms, and this is largely reflective of milk procurement prices, which have increased across the board.

Just trying to understand why is that kind of contraction not visible in Milky Mist numbers? Second sub-question to that is, there are news reports of sharp increases being announced in the last 1 week in milk procurement prices in Tamil Nadu upwards of around 15%.

How should one look at gross margins in quarters ahead, especially in line of other overall inflationary pressures? I am assuming we would have taken price hikes last year in any case.

Is there more room to take price hikes further? That would be my first question, sir.

Sameer, okay, let me answer part of this question, then Mr. Biswajit will explain about the margin expansion.

As far as Milky Mist is concerned, as you all know, we don't sell pouch milk, we are only into a value-added product category. It's not a single product category, but we have got more than 20 product categories.

Every category is growing. If you look at it, you must have noticed during my speech that paneer has been growing at 30 that is 34%, the cheese is at 36% 38%, yogurts is at 150%-plus, and ice creams is more than 60%.

All this product mix is the value or volume and margin drivers, okay? They are driving the margins.

That's number one. We are not depending on the liquid milk for our margins, but our margins are contributed largely from this kind of a product category mix.

Number two, partially I will answer to that question with regard to the price increase in milk. We were already paying about ₹41, ₹42 per liter with a landed cost of ₹45 to the farmers before the Aavin increases the price of ₹3 earlier.

Now, yesterday, they increased another ₹3, and we'll have to see whether that ₹3 directly going to the farmer or what is the commission basis and all those things. We are studying that one.

Having said that, since we are not into liquid milk and we are in a position for the pricing ability across all our product category. With that, I ask Biswajit to answer to your margin expansion.

Yeah. Last time also we discussed in various discussion, pricing increase strategy is there with our product strategy.

Whenever there is a input price increase, the gestation time like 2, 3 months, we wait for the sustainability, and then we take action on the product price increase. That is the strategy for our margin sustainability, and that will continue.

Today, if you look at the price increase what we have done, we have done in last Q4 of last year, we had done the price increase, and the results are coming in Q1. You are right, there are some price increases now recently happening.

We have also closely studied all this price impacts, and once we are through with the analysis, and we'll take a action on the price increase. The strategy will remain same.

Whenever there is a cost impact and there is a sustainability pressure on margin, we will take action on that.

Just a follow-up, Biswajit, on this. What would be the pricing overall increase reflective in this first quarter numbers, since last year at this time you would not have taken any price hike?

Are you Sameer?

Yes.

Hi Sameer. So 10.5%.

Thanks for the opportunity. Sir, two questions.

One regarding the freight cost, because at least what we understand from various other dairies in India that they in order to reduce the freight cost and to reach out the customer very quickly as far as the fresh products are concerned, they need to have multiple manufacturing units, whereas in case of our company, we have one plant, and we cater to even far longer cities like even Mumbai, Pune, or any other cities also. How does the freight mechanics works for us?

I guess we have own trucks. If you can elaborate a bit on that aspect.

That is question number one. Question number two, if you can indicate the price hikes which we would have implemented, let's say, in past 12 months across the products, maybe paneer, curd, etc., all the products, and how do you see the need of price hikes in coming quarters as the procurement prices continue to be in inflationary mode?

Thank you, sir.

Thanks Aniruddha. With regard to the transportation, a bit of an elaboration I would like to give you.

See, when you compare with all others, because most of the peers or the other dairy operators, they're all into 70%, 80% in liquid milk. Liquid milk essentially requires the shorter transportation within the radius of 100 to 120 km, okay?

Because pouch milk also has got a shelf life of around 24 to 48 hours. You have to be very closer to the markets.

Whereas in our case, we have a minimum shelf life of products is starting from 30 days. Then we have a very strong manufacturing unit at one place, number one.

Number two, the company own and operate more than 375 the transportation fleet. That gives us an ability to load the products as it comes out from the manufacturing lines, and then it goes uninterrupted to their respective destinations.

That gives us since it is our own logistics, we operate every truck round the clock using our artificial intelligence and IoT kind of things. They reach almost something like a 75%, 60% of the time what other third-party operators take.

That gives us the faster turnaround of the reaching of the product to the market. Also while coming back, these trucks carry we have established a very beautiful and robust reverse logistics.

When they come back from, say for example, Delhi and Punjab and other parts of the country, they bring return load essentially food products, fruits, or vegetables, or grains, etc., etc., to third parties back to Bangalore or Hyderabad or Chennai, they offload and come back. We save about roughly about 18% to 20% on the logistics cost when we are using our own transportation and skillfully employing those trucks for the reverse logistics.

Having our own trucks helps us to reach the products within the shortest possible time, number one, and retaining the quality till the product reaches to the destinations. Number three, which also helps us in saving the cost to the extent of 18%, 20%, as I said, and also helps us to bring back our various packaging materials or crates from across the market.

That's about the logistics. Your question on pricing, maybe you can answer how much we have increased.

Yeah.

That I already answered. 10.5% we have increased, which offset our milk price increase and other input cost increase.

We have a margin expansion of 2.7%, which is net output of that.

Yeah.

Last year, as he rightly said, close to 11% the price increase as far as the product is concerned. See our focus is continuously on the bottom line.

We also keep a very, very close watch on our product mix, number one, number two, on an operational efficiency, and number three, on the input cost, particularly milk, which contributes about close to 50%, 55% of the total input cost. We monitor all these things, and we have the pricing ability.

We still have some more ability to retain and pass on that to an extent. Our price increase, unlike what liquid milk operators have got a little bit of constraints, we do not have that constraint.

As and when required, within the possible limit, we would be in a position to take a price hike as and when needed.

Sure, sir. This is very, very helpful.

Just last question. If you can indicate the trade margins, that is essentially the MRP to company's own realizations, what will be the in a way, spends that we would be incurring on trade.

I guess some part will be indirect cost also, but I guess it is largely now reduced drastically post the GST changes. Excluding GST, what will be the overall trade spends or the conversion from let's say MRP to own realizations for the company across key products if you can indicate?

That's my last question. Many thanks.

Aniruddha, I think I'll give a blended to understand and which we can apply to every product. From MRP to billing, we have around 4.5% to 5% that we give trade discount.

We have another 4.5% to 5% in the marketing like promotion.

Yeah.

Hi, sir. Congratulations on a strong set of numbers.

My question first question is largely about the last quarter base quarter rather. I believe summer was weak.

How much of this growth can be attributed to the weak summer last year or the low base probably last year, if you can elaborate some numbers over there? Also if you can sort of elaborate about the seasonality and the quarterly variation on the margins, which probably quarters are better for you in terms of margin and which are the weaker ones?

I'll answer. See Sanjay, thanks for that question.

See, as far as we are concerned, all quarters are equally important for us, and particularly the second half of the year, H2, will give us an additional revenue to the extent of 150 to 200 crore. This first quarter, of course ice cream contributed to an extent.

Equally, the other products are also grown. It is not only the ice cream growth is 60%, but the growth from other categories is also equally important like yogurts and cheese, paneer.

All these things have been growing in the range of 30% to 40% in between. Those things contribute a blended way of margin expansion.

At the same time, we see a similar growth going forward also, because only the ice cream which performed well in the summer, extended summer, but now summer is not going to be there, we will not sell any ice cream. For us in South, ice cream is going to be other than this particular 2 months of this monsoon period, which is a slight low, but otherwise ice cream sales is going to be robust as far as we are concerned around the year.

Having said that, since we have a good product mix, okay, these products mix are not affected by the seasonalities, and they are round-the-year products, basic needs of the products, and they will continue to grow, and we will continue to have a similar margins going forward also.

Right, sir. Yes, sir, go ahead if you wanted to add something.

You want to understand the Q1-Q1 difference, right?

Right, sir.

If you look at the Q1 last year, like you're rightly saying that Q1 was a bit slow, but it was not because of the volume. If you look at closely, it was because of the price.

Last Q1 was not very good, it's because our pricing ability due to GST and all, and initially we started now looking at milk rationalization and all, we could not take the price increase to the consumer that time. It was more of price, not the volume.

Okay. Understood, sir.

Sir, my second question is on the whey protein side. I believe as of now, whatever the whey you have been extracting from paneer manufacturing process or for that matter cheese manufacturing process is what I understand should be as of now, you would be selling it as a B2B, and is there any opportunity in B2C high-protein products also?

If yes, is there acceptability for a Milky Mist brand for those products and will we be able to utilize it? How much margin accretive that can be, if we are able to convert this whey protein from B2B to B2C?

See, right now, what we are selling is only whey powder, okay, which is coming out from the cheese and paneer manufacturing. As you rightly said, we generate about 1 million liters of cheese whey everyday, and that has got a good quality proteins.

If you look at our DRHP or RHP, one of the project is to extract protein from this cheese whey and market it both for the internal consumption as well as for the B2B and B2C aspects. That would give us a very strong further expansion in margins as well as bottom-line contribution.

Of course, that is going to happen, 12 to 15 months down the line because we have placed the orders and the plant is expected to be up and running in a minimum 18 15 to 18 months from now. That is one of the area we are looking at very, very optimistic.

We already have a protein category in our system, that is high-protein paneer, high-protein cheese, high-protein yogurts. We already built that category.

We are also into development of few more high-protein ready-to-drink categories, which we would communicate as and when they're ready for the launch. Then, whey protein concentrate will become further improving the category in this regard.

All those things will help us to grow more, to add to the contribution of the top line and as well as the bottom line.

Sanjay, just to answer your first line of question. See, we already have protein category in our portfolio.

Yogurts are doing very well, margins are very high, and all other protein categories like cheese and paneer, we already have protein category, and that are doing very well with very high margin. What you wanted to understand the protein category, as such is already built-in, and we are also working on to expand that side of the portfolio on whey protein like in DRHP is there, it's 1.5-year time.

We are going to create value to that.

Yeah. Right, sir.

Thanks for that, sir. If I may squeeze in just last one from a free cash flow perspective, given the fact that the current year would be still a capex year for you, how would be the capex plan for next year, given the fact that utilization of the current plant is approximately 50%, and will we be able to generate free cash flow from next year onwards?

See Sanjay, with regard to the capacity utilization, see as I said, we have more than 12 product categories where the capacities are available to make use of them. Having said that, if the FSSAI ban analog paneer, and as 90% of the paneer in India is handled by an unorganized sector, there'll be a huge opportunity for us to grow.

Capacity handling is a dynamic situation as far as Milky Mist is concerned. Since we have been growing at more than 30% year-on-year in the last many years, and even this quarter, and looking forward like this also, there could be a little bit of capacity expansions here and there.

With regard to the capex spend, which we have already indicated how much we would be spending for next 3 years as far as RHP is concerned, that is on a whey protein concentrate, on lactose, on natural cheese category expansion, and also capacity addition in processed cheese as well as in yogurt categories, okay. You can give a brief.

See, if you look at capex, we have 500 crore of capex inbuilt in the RHP itself, and another 150 crore capex inbuilt in the RSP. We have 650 plus 5 50, 700 crore of capex there in the DRHP or RHP.

We also have an WIP of 380 crore in book last year. Those are all is going to come to the book, and okay, when we do that, we have sudden maintenance capex, and ancillary capex will be coming.

Those all capex are actually funded either through IPO or already funded through bank, and we settle that. There is no cash flow pressure in terms of capex maybe this year, because we are actually having a lot of free cash available to debt repayment and our own profitability expansions.

We are comfortable in terms of free cash, and how much in dollar is all we'll evaluate that, but we are very comfortable the way cash flows are looking at now.

Okay. Understood, sir.

Thank you, and all the best, sir.

Thank you. Thanks, Sanjay.

Hope I'm audible. Yeah.

Congratulations team on a good set of numbers. Just as an extension to what one of the analysts asked about procurement price and all that, I just want to first understand in general how is the flush going on right now, and year-over-year, I've been reading and hearing from places that there's been a structural decline in the yield per animal.

Would you have any comments based on that, and if you're taking any initiative or you're seeing that any improvements on that side? Yeah.

Thanks, Naveen. You see, our volume growth as far as the procurement volume growth has compared to Q1 between Q1 FY 2026 and Q1 FY 2027 is concerned, it's a 28%, okay?

That's the volume we have grown as far as the procurement volume is concerned. While there could be a little bit of a slowdown in the milk productivity, what we are seeing is in a different picture, because we are expanding our procurement network, number one, and we are also tying up with the banks for the financing to our farmers with all the nationalized banks, because you have a Kisan credit card and other things.

Farmers have been with us since more than 5 to 10 years. We are tying up with the banks who are our lenders also, to extend the credit facility to our farmers.

We are also increasing the herd size, if the farmer has one or two animals, we are asking them to have a couple of them more. Apart from that, we have a very strong and robust input services like artificial insemination, breeding, genetics, and feed and fodder development, as well as doctors on the call, and health camps, etc., deworming, etc.

All those things help us to improve the productivity per cow. That is going to be our primary focus.

Since we require more and more milk, we are also like marketing, we are focusing very much on the backward integration, and for an inclusive growth with the farmers. Thanks.

Got it, sir. One small follow-up clarification.

Do we still see for the next year, the prices to be stressed, getting worse or getting better? Just your outlook would be helpful.

See, we see a very bright future, Naveen, okay? That we are looking this sector as say one of the brightest spot for us, and particularly from my side, having in the milk industry for more than 30 years, these are all cycles which keep going up and coming down, but nothing major to worry as far as we are concerned as Milky Mist.

Got it, sir. My second and final question to you would be regarding our EBOs.

I've just been noticing that we've been scaling that up. Just wanted to understand your sense of how they're doing, and what your plans are for the future, and if you have any targets with respect to them, or something along those lines?

Can you elaborate the first part of your question, please?

Exclusive brand outlets that we've been adding, sir. Just want to understand how they're doing.

See,

we started this exclusive outlets on an experimental basis, and as of now, we have about 140 exclusive outlets. With the changing sales landscape, with the quick-comms coming in a very strong way, okay, and with modern trade setting up the stores across the places in the Tier 1, Tier 2 cities, we are looking at this as one of the strongest revenue contributor, but at the same time, we are also very cautious about setting up these things in the semi-urban and rural areas rather than focusing in the city areas.

While it is going to be one of our focus, that focus and strategy will evolve based on the kind of e-com and modern trade shaping up in that particular area and region. I just leave it at that.

We have about 140, and we will add up those numbers, but subject to the market conditions and the sales mix.

Hello.

Yeah.

Hi, thanks for the opportunity, and congratulations on a good set of numbers, sir. I have a few questions.

First is, what is the average daily milk procurement volumes in Q1, and mix between direct farmer and third-party procurement? I know it was 85% to 15%.

Has it been changed? You have told that the landed cost for direct farmer procurement is ₹45 per liter.

Can you also tell what is the landed cost for third-party procurement channels? I'll come up for the second question.

Fine. See, when you talk about the milk volumes, as I said, that for Q1, our daily average procurement is 13.2 lakh liters per day, okay?

That's 13.2 lakh liters per day. That is our daily procurement volume.

This volume, since we are not interested in manufacturing any commodities, and with so much of a very controlled milk balancing system which we established over a period of time in our setup, we continue to expand our procurement activities as we grow in the product demand, okay? That's number one.

Number two, when it is coming to the procurement cost, yes, our landed cost is ₹45. We are paying ₹42, ₹41, between 41 and 42 to the farmers, and remaining is the input cost to transport the milk from collection centers to the factory.

Now, our procurement price, the variation between us and I'm not saying it's a third party, but our partner, okay, is the same. At the same time, whenever there is a good quality milk coming in based on certain parameters like microbiological, aflatoxins, and all those things, we pay about 50 paise more not only to our farmers, but to our partner farmers also.

That doesn't change much of the things. Since their volumes is about 10%, 12%, that will continue to be there in the system.

At the same time, we are expanding our procurement network in Tamil Nadu and other parts of the places like Karnataka and in Maharashtra. Going forward, our own volumes would increase, and our partner third-party volumes would slightly go down.

Thanks, sir. My second question is, what is the maximum revenue potential you are expecting from your Perundurai plant, post which you have to do capex for any new facility?

Approx range would be helpful, maximum revenue potential.

Let me tell you about the capacities we have. We have a larger capacities still to sweat our assets like in ice creams and yogurts and etc., etc.

Also in cheese, with the current capacity addition, we have a larger headroom to play. Paneer in the range of around 50%.

The revenue with the current MRP, the pricing of the product, we expect in the range of 3x of FY 2026, 3, 3.5x of FY 2026 numbers.

Yes, hi sir. Thank you for the opportunity.

Just two quick questions. Firstly, our regional mix at about 70% in the South and 30% in non-South, has it been more or less constant in the past 1 year, which implies that has our growth been more or less along the same lines in the non-South and the South regions?

If you can talk a bit about the regional growth trends over the past 1 year. Secondly, in terms of Maharashtra specifically, do we have any sort of sourcing plans?

Are we already sourcing some amount from Maharashtra? If not, going forward in the near term, do we have any further plans to set up capacities there and source something from here as well?

These are my two questions. Thanks.

See, if you look at our historical data, we have uploaded the presentation into the website. If you look at it, historically, the revenue from non-South has steadily growing, okay?

Currently, we are operating at 70:30, that is a 69% from South and remaining 30%, 31% from non-South. Since South is also growing at 44%, and non-South is growing at 50% year-on-year, that's why we expect a blended of around 43%, 44% growth.

The growth is inclusive. It is not that only South is not North is growing because of our expanding the market penetration, but South is also across the markets, wherever we are present in all five states, it has been steadily growing.

Going forward, there will be a gradual change, but it could be in the range of 60:40, there won't be any drastic reduction in South and non-South the next 5 years.

That's

what we are looking at it. With regard to your second part of the question as far as the procurement is concerned, we have been, as a strategy and a business continuity point of view, Milky Mist has been evolving various strategies of having not depending on only one source of milk, particularly from one region.

We started expanding our procurement network in adjacent districts of Karnataka, and also we are setting up of the procurement activities in Maharashtra. Continuously, since we have taken the land there, and we are planning to establish the new setup over there, we initiated the procurement activities about 6 months back, 6, 7 months back, and we'll continue to improve our procurement activities and take it to a sizable volume before we commission our plant, so that the plant can handle at least 40% of the capacity utilization from the day one, which gives a break-even point.

Just a quick follow-up on your comments on Maharashtra, sir. You were saying that you are in the process of setting up capacity there.

Any further details that you can share in terms of size, in terms of probably the yield in the first year, any numbers that you can share over there?

See, right now, as far as the plant configuration and the capacities are concerned, it is still at a very nascent stage. We are at a drawing board level.

As I told you earlier, all those things depends upon what kind of growth we are overseeing for next three to four quarters, okay? If you continue to have this kind of growth, maybe we may have to accelerate our implementation little advance.

Otherwise, we will have a plan, as I told you, about three to three years down the line, we will have the manufacturing capacity there. Those capacities and all those things, maybe I would able to tell you once we have a very concrete plan in our hand.

With regard to milk procurement operations, yes, we have been very focused as far as Maharashtra milk procurement is concerned, and we have been setting up of our procurement setup directly from the farmers, receiving that milk, chilling it, and bringing it to Perundurai plant on a concentrated format. Thank you.

Thank you for the opportunity. I wanted to understand what is the leverage that you will get between your gross margin and operating profit as your capacity utilization increases and if gross margin remains stable, how much scope is there to increase the operating margin?

The operating margin will be enhanced because of the scale benefit, and whatever expansion is happening today, like 12.2% last quarter to now 14.9%, 15%, there are some amount of leveraging happening because of scale. That is there.

See, if you ask exactly, we would be expecting around 0.5% leverage benefit from there.

Sorry, I didn't get. Can you please repeat?

0.5%.

0.5%.

0.5. How much can operating margin go up to, because your capacity utilization in some of the products is low right now, obviously because you set up very large capacities.

Can it go to 18% or will it stabilize at 15%, 16% is what I wanted to know?

No, 15% is we have reported now. Yes, definitely, see I have given you 0.5%, and then the pricing ability, milk price shifting, all are there, all other factors.

Yes, we are anticipating that kind of growth what you are anticipating. It is all anticipation in future.

We will be comfortably doing this expansion in terms of pricing ability as well as the scale expansion, and that will benefit in our EBITDA margins going forward.

In about three, four years, when you have better utilization, can we expect 18% kind of margin?

I cannot confirm you, but yes, you can expect that. Margin expansions can happen with the capacity utilization, product mix, and sweating up of assets, and also the market expansion activities.

Definitely, we see a margin expansion. Quantification of that margin expansion 3 years down the line, I would leave it to your analytical abilities.

I think probably you would be in a right position to tell us rather than we are giving, say, 17% or 18%. Yes, there's a larger headroom to play to help us to expand the margins.

Thank you.

Okay. Thank you very much.

There are no questions, I suppose, right?

Okay. Sir,

Of course. A little bit to all the analysts and everyone present in the question-answer session.

To summarize, Milky Mist has entered fiscal 2027 with a very strong momentum, as you have seen with the results as well as the growth. This is just the beginning of our journey as a listed company, and we look forward to engaging with all of you regularly as we continue to build Milky Mist into one of the India's most trusted and admired food and dairy brands.

When I say that one, we'll looking at a very bright future going forward is, you look at the segment, the segment has been growing at, if you look at it the dairy sector I'm talking about, let me come to the FMCG sector. In this sector, the growth has been in the range of around 10%, 12%, 14%, whereas we have been growing 3x of what our peers and the sector is growing.

Our sector is growing, I would say. That's number one.

Our margin expansion is happening, as you have seen, and our EBITDA margins are also higher by 4% to 5% as compared to the other players in the market. Going ahead, if you look at it, leaving aside the liquid milk, the dairy sector, what all the value-added products has been growing, which has been projected to grow in the range of 15% to 25%, depending upon the product category.

If you look at last 5 years and going next 5 years, the growth has been similar. In fact, there's a slight offtake in a product growth.

That is number one. We have a larger headroom, since we are not in milk, whereas only in the products, number one.

Number two, if you look at paneer, now the paneer has become one of the hottest topic today in India, particularly with respect to analog and real paneer. To give you a figure, about 90% of our 95% of the paneer which produced in India is handled by an unorganized sector, loose paneer, unbranded, whatever you call it as.

Just only 5% to 7% is handled by organized sector like Milky Mist. In that, Milky Mist has about 20% market share, close to.

Just imagine that if the unorganized share is going down, and the organized market share is going up to 25%, say for example, what would be the potential available for a player like us, Milky Mist particularly, okay, since we are in that category, we have established. We are cheese again, there are only very, very limited players, but the category is growing in the range of 18% since last many, many years.

We are very much there, and we have the capacities additional. The yogurt category is another important factor to us, and that has been growing leaps and bounds thanks to protein.

We look at protein as a category going forward, and we would like to give a very nutritious, good products to the consumers. Name any product in the sector, in the category, we have a larger headroom to play.

We have invested well ahead of the time. We have built larger capacities.

The capacities are required to be utilized and sweated. We have a larger headroom to play to make use of our capacity, and we will continuously to build our marketing network to make this brand as one of the largest brand in India, okay?

With that, I close the session. If you have any further questions, please reach out to our Adfactors PR and our investor relations partners.

Thanks a lot for asking a lot of questions, and that also gives us a lot of understanding about the sector and from your questions. We look forward similar kind of interactions in near future.

Thanks.