Dodla Dairy Q2 FY27 Earnings Call — Analysis (NSE: DODLA)
Revenue grew 17.4% YoY to ₹1,196 Cr but EBITDA margin contracted to 5.4% due to elevated procurement costs, with management guiding margins to rebound to 7.5%-8.0% in Q3FY27 following late-September price hikes.
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q2FY27 Revenue from Operations ₹1,196 Cr ( +17.4% YoY ) . Guidance raised . But walked back — OSAM turnaround and integration .
Results
Revenue grew 17.4% YoY to ₹1,196 Cr, EBITDA stood at ₹64.1 Cr (margin 5.4%), and PAT was ₹36.6 Cr (margin 3.1%) amid procurement cost inflation to ₹43.2/litre.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue from Operations | ₹1,196 Cr | +17.4% | yoy · Q2FY27 |
| Gross Profit | ₹275.7 Cr | +23.1% | none · Q2FY27 · Gross margin 23.1% |
| EBITDA | ₹64.1 Cr | +5.4% | none · Q2FY27 · EBITDA margin 5.4% |
| PAT | ₹36.6 Cr | +3.1% | none · Q2FY27 · PAT margin 3.1% |
| H1FY27 Revenue | ₹2,394 Cr | +18.2% | yoy · H1FY27 |
| H1FY27 EBITDA | ₹129 Cr | +5.4% | none · H1FY27 · EBITDA margin 5.4% |
| H1FY27 PAT | ₹77.2 Cr | +3.2% | none · H1FY27 · PAT margin 3.2% |
| VAP Sales | ₹327 Cr | +11.7% | yoy · Q2FY27 |
| Africa Revenue | ₹179 Cr | +56% | yoy · Q2FY27 |
| OSAM Revenue | ₹82.37 Cr | none · Q2FY27 · 1.33 LPD volume | |
| Cash & Bank Balance | ₹659.4 Cr | point_in_time · Q2FY27 · As of Sep-26 |
Guidance
Management expects consolidated EBITDA margins to normalize to 7.5%-8.0% in Q3FY27 and continue across H2FY27 following the ₹2.5/litre realization hike taken in late September.
What management committed to
- Uganda greenfield expansion will commence operations by FY28 beginning. — Q1FY28
- OSAM Dairy will transition 70-80% of its procurement to the direct farmer payment model (Dodla model) by March 2027.
Key themes
Procurement inflation trough and margin recovery
Operational commentary
- Board approved 40:60 Joint Venture with UK-based Meadow India Holdings Ltd to market and sell specialized B2B dairy ingredients, with Dodla investing ₹1 Cr initial equity.
- Maharashtra plant execution: Liquid milk processing operations targeted to commence by March-April 2027; powder plant operations targeted by September 2027.
- Africa expansion: Civil works commenced on 70-acre greenfield project in Uganda, targeted for commissioning in early FY28.
- OSAM Dairy transition: Direct farmer payment model rolled out to 25%-30% of milk procurement, targeting 70%-80% conversion from agent model by March 2027.
- Pricing action: Implemented ₹2.5 per liter milk price hike in late September 2026 to counter the procurement cost rise to ₹43.2/litre; full realization impact to reflect in Q3FY27.
Analyst Q&A
Q. What is the outlook on milk procurement costs and how will pricing action protect margins?
Procurement costs have peaked after being front-loaded in Q1 and Q2. With adequate industry inventory building up, no major price increase is expected in Q3/Q4. The late-September ₹2.5/L price hike will lift EBITDA margins to 7.5%-8.0% in Q3.
Q. Why did OSAM Dairy profitability remain muted and when will it scale?
OSAM delivered 1.0% EBITDA margin in Q2 as milk inflation in Bihar was high. Management is stabilizing plant layouts and shifting procurement from agents to direct farmer payments (targeting 70%-80% by March 2027), aiming for 4%-5% EBITDA in H2.
Q. What is the strategy and capital outlay for the Meadow India B2B dairy ingredients JV?
It is an exploratory JV with a nominal ₹1 Cr equity investment for Dodla's 40% stake, focusing on customized dairy ingredient mixes and ice cream inclusions rather than consumer products.
Research and educational content only. Not investment advice.