Dodla's 5.36% margin trails FMCG peers as milk costs bite
Management cited elevated procurement costs and softer seasonal demand, while saying festive demand shifted to Q3 and value-added products should benefit.
Filed 28 Oct 2026, 21:43 IST · after market close · Dodla Dairy Ltd (DODLA)
Key takeaways
- Dodla's consolidated operating margin was 5.36%, 6.94 percentage points below the 12.3% median for 20 FMCG peers that had reported.
- Management attributed gross-margin pressure to elevated milk procurement and inflationary costs, even as procurement reached 21.3 LLPD, up 9.3% year on year.
- Other income of Rs 10.94 cr sat alongside Rs 50.57 cr of pre-tax profit, while the tax rate was 27.64%.
Price around the results
Operating profit absorbed by procurement pressure
Dodla reported consolidated Q2FY27 revenue of Rs 1,196.02 cr and operating profit of Rs 64.09 cr, leaving operating margin at 5.36%. The bridge from operating profit of Rs 64.09 cr to pre-tax profit of Rs 50.57 cr reflects depreciation of Rs 23.55 cr, partly offset by other income of Rs 10.94 cr and interest of Rs 0.91 cr. Net profit was Rs 36.59 cr after tax of Rs 13.98 cr.
Margin sits below the FMCG peer median
Management said elevated milk procurement prices and inflationary costs continued to pressure gross margins, while demand for summer-related products was softer than in the previous quarter because of seasonality. Dodla's 5.36% operating margin was 6.94 percentage points below the 12.3% median for 20 Fast Moving Consumer Goods peers that had reported. Other income was also a meaningful contributor alongside pre-tax profit of Rs 50.57 cr, so operating performance remains the cleaner read on the quarter.
Volumes grew as management pointed to Q3 festive demand
Milk procurement reached a record 21.3 LLPD, up 9.3% year on year, while milk sales volume was 14.2 LLPD, up 8.4% year on year. Management said the festive season had shifted to Q3 and should support value-added products including ghee, sweets and flavoured milk. The company also said its planned expansion initiatives were progressing as planned, including a Maharashtra project planned to add 10 LLPD of capacity.
Results were filed after market close
The consolidated results were filed at 21:43 IST on 28 October 2026, after market close. An immediate stock-market response is therefore not covered here.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 |
|---|---|
| Revenue | ₹1,196 cr |
| Other income | ₹11 cr |
| Expenses | ₹1,132 cr |
| Operating profit | ₹64 cr |
| Operating margin (%) | 5.36% |
| Interest | ₹1 cr |
| Depreciation | ₹24 cr |
| Profit before tax | ₹51 cr |
| Tax | ₹14 cr |
| Net profit | ₹37 cr |
| EPS (₹) | ₹6.06 |
Operating margin of 5.36% compares with a Fast Moving Consumer Goods sector median of 12.30% across 20 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Milk procurement reached a record 21.3 LLPD, up 9.3% year on year.
- Milk sales volume was 14.2 LLPD, an increase of 8.4% year on year.
Guidance & outlook
- Festive demand shifting to Q3 is expected to boost value-added products such as ghee, sweets and flavoured milk.
- The company says its planned expansion initiatives are progressing as planned.
- The company has started witnessing positive momentum in the current month.
Expansion
- The Maharashtra project is planned to add 10 LLPD of capacity.
New initiatives
- The company is strengthening procurement and distribution capabilities and driving operational efficiencies.
Problems & risks
- Elevated milk procurement costs are putting pressure on gross margins.
- Demand for summer-related products was softer than in the previous quarter because of seasonality.
- Higher procurement prices and inflationary costs continued to pressure gross profit margins.
What to watch
- Whether operating margin improves from 5.36% as milk procurement costs remain elevated.
- Whether milk sales volume builds from 14.2 LLPD after management said festive demand shifted to Q3.
- Progress on the Maharashtra project's planned 10 LLPD capacity addition.