- Milky Mist Dairy’s market cap nearly doubles combined value of three peers at Rs 23,095 crore
- Q2 FY27 revenue rose 41.06%, with EBITDA margin improving to 15.2% and net profit tripling
- High-protein products now 12% of revenue, expected to reach 18-20% in next 2-3 years
Milky Mist Dairy Food Ltd. is valued at nearly twice the combined market capitalisation of Dodla Dairy Ltd., Heritage Foods Ltd. and Parag Milk Foods Ltd. The company's market capitalisation stood at Rs 23,095 crore as on Nov. 3, compared with Rs 12,729 crore for the three listed peers combined.
The valuation gap comes as Milky Mist expands beyond conventional dairy products into high-protein paneer, cheese, Greek yoghurt, skyr and lactose-free milk. Its revenue grew 41.06% year on year in Q2 FY27, while its Ebitda margin increased to 15.2%. The company also expects protein-focused products to account for as much as a fifth of its revenue over the next two to three years.
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Investors are paying 132 times Milky Mist's earnings, against 28.3 times for Dodla Dairy, 30.2 times for Heritage Foods and 23.1 times for Parag Milk Foods, according to the Nov. 3 market data. The difference in earnings multiples comes alongside a significant gap in operating margins and revenue growth.
Valuation Gap
Milky Mist reported revenue from operations of Rs 1,089 crore in Q2 FY27, up 41.06% year on year. Ebitda increased to Rs 165.2 crore from Rs 53.9 crore a year earlier, taking the margin to 15.2% from 14%. Net profit tripled to Rs 77.9 crore from Rs 28.4 crore.
For the first half of FY27, revenue increased 42.5% year on year to Rs 2,062.9 crore. Ebitda rose 62.9% to Rs 310 crore, while the margin expanded to 15.03% from 13.2%.
The performance contrasts with that of its listed peers.
Dodla Dairy reported Q2 FY27 revenue of Rs 1,196 crore, up 17.4% year on year. Ebitda stood at Rs 64 crore and net profit at Rs 37 crore. Managing Director Dodla Sunil Reddy said higher milk procurement prices had kept profitability under pressure. The company also faced higher logistics and packaging costs. Its value-added products portfolio grew 11.7% during the quarter.
Heritage Foods reported consolidated revenue growth of 19% to Rs 1,319.6 crore. Ebitda stood at Rs 74 crore, with a margin of 5.6%, while net profit was Rs 30.9 crore. Whole-Time Director Dr M Sambasiva Rao said the company's average landed milk procurement cost increased 11% year on year to Rs 47.73 per litre.
Heritage, however, is also expanding its value-added products business. Revenue from these products, excluding ghee and butter, increased 32% year on year to Rs 451 crore in Q2. Their contribution to revenue rose to 35.4% from 31.3% a year earlier.
Milky Mist's 15.2% Ebitda margin is significantly higher than the 5.6% reported by Heritage Foods and the approximately 5.4% reported by Dodla Dairy.
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Protein Push
Milky Mist's expansion into high-protein products is a key part of its strategy. The category contributed around 12% of revenue in FY27, compared with 7% a year earlier, Whole-Time Director and CEO Dr K Rathnam said during the company's Q2 earnings call.
"We see this as one of the strong emerging categories in the coming years," Rathnam said, adding that the contribution could increase to 18%-20% over the next two to three years.
The portfolio includes high-protein paneer, cheddar cheese, yoghurt, skyr and lactose-free milk. The company launched high-protein paneer cubes in Q1 FY27 and introduced high-protein lactose-free milk in October. A 250 ml pack contains 25 grams of protein, according to Rathnam.
The margin in these products are also higher than those in several conventional dairy categories.
CFO Biswajit Mishra told analysts that yoghurt had the highest margins among the company's product categories and that similar margins applied to its protein portfolio.
Rathnam said the Greek yoghurt category generated gross margins of more than 50%. He also identified ice cream and paneer as high-margin categories.
The company's yoghurt business grew 168% year on year in Q2 FY27, making it the fastest-growing category during the quarter. Cheese revenue increased 34%, curd grew 22% and ice cream revenue rose 43%.
Milky Mist commissioned a Rs 40 crore manufacturing facility for Greek yoghurt and skyr at its Perundurai plant in September. The facility uses ultrafiltration technology and increased installed capacity from 20 tonnes per day to 180 tonnes per day. Current production stands at around 35-40 tonnes a day, Rathnam said.
The company is also benefiting from the growth of online distribution. Online channels contributed 21% of revenue in H1 FY27, compared with 11% a year earlier. Rathnam said high-protein products were among the fastest-moving categories on quick-commerce platforms.
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Expansion Plans
Paneer remains Milky Mist's largest product category, with revenue growing 44% year on year in Q2 FY27. The company currently produces around 100 tonnes a day against installed capacity of 150 tonnes, with utilisation at approximately 65%.
Rathnam said the company expects existing paneer capacity to approach full utilisation over the next 24-30 months. It is considering an additional 200-tonne-per-day facility at Perundurai, which would increase total installed capacity to 350 tonnes.
The company is also preparing to expand its presence in western and central India. It has acquired 50 acres in Baramati, Maharashtra, and is working on the design, development and approvals for a manufacturing facility. Rathnam said the plant could become operational in about three years.
South India contributed around 70% of Milky Mist's revenue in H1 FY27. Tamil Nadu accounted for 26% and Karnataka 23%. The company had around 4,200 distributors and nearly four lakh retail touchpoints across India as of the September quarter.
Milk procurement costs remain an important consideration. Rathnam said milk and packaging input costs increased around 11% in the first half of FY27. The company took price increases in a similar range across selected product categories to offset the rise.
Milky Mist procured 246.5 million litres of milk in H1 FY27, up 31% year on year, and had a network of more than 92,000 farmers as of Q2 FY27.
Rathnam told analysts that the company expected to sustain its current growth rate and Ebitda margin of around 15%. He said higher sales of yoghurt, ice cream and other high-margin products, along with better utilisation of manufacturing capacity, would support profitability.
Milky Mist reported net debt of Rs 32.6 crore as of September, following the receipt of proceeds from its initial public offering.
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