Dodla Dairy (NSE:DODLA) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Dodla Dairy Limited Q1 FY 'twenty seven Earnings Conference Call. This conference 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 do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, Please note that this conference is being recorded.

0:48 I now hand the conference over to Mr. Dodla Sunil Reddy, Managing Director, for his opening remarks. Thank you, and over to you, sir. Thank you very much. Good morning to all the participants. On behalf of Dodla Dairy Limited, I extend a very warm welcome to everyone joining us on our call today. On this call, I'm joined by our CEO, Mr. D. D. Keredi our CFO, Mr. Mugi Mohan Raju and SGA, our Investor Relations Adviser. I hope everyone had had an opportunity to go through the financial results and investor presentation, which has been uploaded on the stock exchanges and our company website. Q1 financial year twenty seventeen was marked by highest ever quarterly revenue of INR $11.98 crores, a year on year increase of 19%, along with the record milk procurement of around 21.1 lakh liters per day, supported by the revival in the milk supply.

1:47 EBITDA for the quarter stood at INR 65 crores, translating into an EBITDA margin of 5.4% and Pats stood at INR 1 crores. While milk availability has improved during the quarter, procurement prices did not come down as the focus was on building up the inventory for future requirements. Our strategy is in line with the overall industry trends. These elevated procurement prices were not fully passed on to the consumer, resulting in continued near term pressure on our profitability. With this in view, we will be able to pass on the increase in price to our consumers in the forthcoming quarters. This said, the year on year decline in EBITDA and PAT is largely cyclical driven by the input cost fees, and we expect gradual recovery from Q2 onwards.

2:36 Our procurement network also continued to strengthen during the quarter. Procurement in Maharashtra and Karnataka improved, and we continue to add more farmers to our network. Coming to our value added products portfolio, we recorded our highest ever sales of INR $4.15 crores, registering a 17.6% year on year growth, supported by prolonged summer seasons compared to the earlier onset of monsoons in Q1 FY 'twenty six. We see a strong demand across our summer oriented products such as curd, buttermilk, flavored milk, ice cream and other value added products. Notably, the highest ever number is achieved without any support from bulk sales for S and P or butter, reflecting our continuous efforts and dedication of our team towards the vast product mix aspiration.

3:31 On a like to like basis, excluding the bulk sales proportion, VAP delivered a solid growth of 40.6% year on year. Africa business delivered another strong quarter, recording the highest ever revenues of INR154 crores, representing a solid growth of 45.6% year on year. EBITDA also touched a record of INR24 crores, increasing 74% year on year. We continue to maintain our market share of approximately 50% in Uganda long life milk category and yogurt. In Kenya, our processing capacity continues to ramp up towards full utilization, while our current market share has remained modest at around 2% to 3%. Our Orga feed segment continued to complement our core dairy operations during the quarter. Beyond its financial contribution, this also plays an important strategic role in strengthening our procurement ecosystem and maintaining good relations with farmers, enabling us to manage the industry wide challenges such as periods of low milk availability.

4:33 Coming to our Osam business, the integration continues to progress well following the acquisition. Revenues for the quarter stood at INR91 crores and we are gradually seeing improvement in our profitability. We continue to focus on improving operational efficiencies across sourcing and costs while strengthening our presence in Eastern Africa with driving long term growth in this business. Now speaking on our expansion initiatives, our Maharashtra greenfield project is progressing as per the plan and time lines for commercial operations remain intact. As part of our Eastern India expansion strategy, we continue to evaluate the optimal utilization of a Chantil plant, including the possibility of shifting flavored milk production at this plant to effectively serve the BR and Jharkhand markets.

5:22 Following the due diligence on land allotted by BIADA, we are revisiting our strategy for capital allocation either towards the land or towards more capacity at the Chandel facility. We aim to strengthen our presence in a more capital effective manner. I would like to inform you that the Board of Directors has approved a primary investment of INR 11.65 crores for around 2% stake in Sid Farm Private Limited. Sid Farm is a premium dairy brand with a strong multi regional direct to consumer and e commerce presence. This investment aligns our core dairy business and provides exposure to the fast growing premium and direct to consumer dairy segment. It also offers us an opportunity to associate with and support the growing for differentiated high quality dairy brand. With this brief, I now hand it over to CEO of our company, Mr.

6:13 B. V. K. Reddy. Thank you very much. Thank you, Mr. Sunil Reddy. So now I will walk through you the quarter performance highlights of our business. Starting with our Dodla Dairy operation. During the quarter, as anticipated, the overall milk supply situation started improving, and we see some increase in our mill procurement volumes, recorded at 21.1 lakh liters per day, which is 13% year on year growth. It reflects the strength of our operational team, direct procurement model and long standing farmer relationship. The average procurement cost Q1 FY 'twenty seven stood INR 41.3 per liter as against INR 41 per liter in the previous quarter and INR 37.4 per liter in the Q1 of FY 'twenty six.

7:11 However, we continued with our approach of gradually passing on the price to the consumers and avoided taking a lump sum price hike. Our average mill sales price for the quarter stood at INR 59.4 per liter, which was INR 58.4 per liter in the previous quarter and INR 57.2 per liter in Q1 FY 'twenty six. Therefore, our margin continues to remain under pressure for the quarter. To put this fees in context, the spread between our milk realization of INR59.4 and the procurement cost of INR41.3 narrowed INR 18.1 per liter from INR 19.8 a year ago, which largely explains the EBITDA margin decline from 8.2% to 5.4%.

8:16 In addition to that, we witnessed some increase in our operational cost, mainly due to input cost inflation and shift in product mix from bulk sales to milk and wrap sales. We see an increase in cost like transportation, overheads, fuel and packing. The packing material cost increased by 48% during the quarter, rising 5.6% of our revenue as at the next 4.4% in the period of last year. We plan to pass on some part of this cost inflation to the end consumer in a gradual manner. Our pricing strategy remain in line with the overall industry trend and reflects a balanced approach.

9:08 Our subsidiary, Wassam Dairy, is also progressing well. We see a healthy contribution from the company in terms of our third and VAP sales volume. With consistent and gradual improvement in operational efficiencies, Wassam is headed towards our targeted scale and margin profile. Coming to Africa business. It delivered a strong revenue growth of 45.6% on year on year, largely driven by a robust milk sales growth of 52.3% on year on year. This is an outcome of our targeted efforts on gaining market share in Kenya by strategically pricing our products. Along with revenue growth, our profitability also improving steadily.

9:57 We are confident in achieving robust and consistent revenue growth along with the steady margin improvement in this business. So coming to feed, Ardagh field recorded revenue growth of 25.9% on year on year. Raw material price growth is still faster than the selling price, leading to continued pressure on the profitability. However, as anticipated, we see a sequential recovery in our profitability, our EBITDA margin for Q1 'twenty seven with marginal sequential improvements to 10.5%. Coming to product mix. Our mill sales stood 13.6 lakh liters per day, an increase of 14.5% on year on year.

10:44 During the quarter, we delivered highest level VAP sales number INR 414.7 crores as against INR 352.8 crores in FQ1 FY 'twenty six. This was mainly due to a seasonal variation explained by our MD as well as improved contribution from our gross on business. Curd and curd based products reported a healthy growth of 41.4% on year on year and stood at 642,600,000 metric tons per day in terms of value and current sales grew by 44.9% on a year on year basis. Going ahead, we expect some modernization in the procurement cost from Q2 onwards, leading to start a gradual recovery in the margin profile for upcoming quarters.

11:38 We are confident to mitigate this near term pricing pressure and remain focused on effective execution and achieving our long term objectives while delivering profitability growth. Now I request Mr. Murali Mohan Rojan, our CFO, to highlight the financial quarters. Thank you, Mr. D. V. K. Reddy, and a very good morning to all the participants on the call. Talking about consolidated financial performance in Q1 FY twenty twenty seven. Revenue from operations stood at $11.98 crores, the highest ever quarterly revenue, reaching a 19% year on year growth. Gross profit for the quarter stood at INR278 crores with a gross margin of 23.2% as again is 25.8% in Q1 FY twenty twenty six. Employee expenses for Q1 FY twenty twenty seven stood at INR56 crores compared to INR47 crores in the corresponding quarter last year.

12:42 The 18% year on year increase was primarily due to OSRAM addition during this quarter and higher employee costs pertaining to the minimum wage criteria as per new labor laws. Other expenses for the quarter were INR159 crore compared to INR130 crore in the corresponding quarter last year, While other expenses remained broadly in line with revenue as a percentage of sales, the increase in absolute terms was primarily driven by higher transport, overhead and fuel costs due to the shift in product mix from bulk sales to liquid milk and value added products. EBITDA for the quarter stood at INR65 crore with an EBITDA margin of 5.4%.

13:29 Depreciation expense increased to INR23 crore in Q1 FY twenty twenty one from INR18 crores in the corresponding quarter last year. Other income for the quarter stood at INR14 crores. Unlike previous few quarters, we don't have any tax credits in Q1 FY twenty seven related to any of the favorable income tax orders. Net profit for the quarter stood at INR41 crores with a net profit margin of 3.4%. On the balance sheet, we remain net debt free with approximately INR689 crore of cash and investment, which comfortably funds our INR590 crore CapEx program along with the HOSA and Africa expansion without any leverage.

14:17 Lastly, I would like to mention that our profitability includes purchase price allocation effects, brand amortization and fair value adjustment. Hence, its underlying profitability runs ahead of the reported figure mentioned in our investor presentation. With this, we conclude the presentation and open the floor for further discussion. Thank you. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

15:11 The first question comes from the line of Praveen Kumar with Acutas Capital Advisors. Please go ahead. Yes. Hello. Thanks for the opportunity. I had a couple of questions. The first one was on the margin trajectory. Can you walk us through how do you expect the margins to behave from here onwards over the next six to nine months? And then also over the next two to three years, can you walk us through what are the triggers? What are the near term and the midterm triggers for improving these margins? Or do you given what has happened on the procurement side and on the pricing side, do you think that margins have structurally reset downwards to some extent?

15:56 That is the first question. The second question was on application part. Just want to understand what process behind behind that. Why why that 2%? That very minor kind of mistake? What are the thought process behind it? Third question was on the growth. If I look at the x I'm sorry to interrupt, Praveen. You're you're breaking up every now and then. Yeah. Could you please change your location and use your phone on the handset mode in case in case if it's not on handset? Yeah. It is on handset. Is it better now? Yes. Yes. Please go ahead. Yeah. So the third question was on the procurement growth adjusted for OSRAM.

16:42 That seems on a Y o Y basis, that seems to have grown around 5.3%. So I just wanted to understand again that most of it has probably come from that Maharashtra scale up. So does it mean that ex of Maharashtra, the other geographies, there hasn't been much of a procurement growth? Yes. Those are my three questions. Thank you. Yes. So thanks a lot Praveen. I'll answer the first two questions and the third question regarding procurement growth in Osan and Maharashtra, BBK will answer. Margin trajectory if you look at it, are still confident that we will maintain between the 78% EBITDA margins even in the current year that we are at, because like we were saying earlier, we were assuming that with those onset of monsoons, the procurement prices will taper down.

17:30 But now seeming to be that there's not much of an increase in procurement in terms of the prices that we normally expect, we will have to slowly pass on the prices to the consumers, which we have already started in the process. With that in view, the margins will start coming back to those between the 78% subject to whatever is the one month of time that it consumes to pass on the prices. In the two to three year scenario that we asked, we are confident of maintaining similar profit margins as we go forward, predominantly because of, a, when we look at it, we are adding on Maharashtra, there is improvement expected from Osan. These are mostly seasonal corrections and not structural in nature. Therefore, are very confident in the two, three years, years will come. Therefore, it is not a reset of the margins, but more seasonal correction that has been happening that is a scenario. Now coming to the capital occasions to sit firm on a miners' day, it is basically for us more in terms of learning and keeping a closer watch on how the modern high value, the B2C products behave. Because for example, we believe that for a consumption pattern to become a habit from a fad, it will take significantly long time.

18:43 And therefore, to test the thesis and such other pieces that we have, we normally try to go learning it with another rather than trying to create on our own. And if it is showing good trajectory and possibility, we will also know beforehand as to how it is progressing. So that is the intention of the capital firm regarding procurement growth. BBK sir will explain why what is happening in BR and it's not only Maharashtra, but also I think they have grown in Karnataka as well, but BBK will explain BR and other growth in procurement. Yes. In some you know, you will see last year procurement last year, see, we don't have right data because we used to use lot of powder and butter. Now we know that we are providing that powder and butter. And now first quarter, more or less, we matched our sales to procurement.

19:30 So there is a slight growth, not much growth because we have done a lot of corrections more than the procurement. We are going for farmer payment model. That's why things are going very slow. But in Maharashtra, we have done a procurement growth. So last year to this year, Maharashtra, we have done a growth of overall growth, have done 13%. We have done a growth of 10% in Maharashtra also. And then Africa, we have done roughly about 28% procurement growth and only procurement growth. That's all from the procurement side. So actually my question on procurement was that, if I take out OSAM, adjusted for OSAM, the remaining unit procurement grew 5.3%, right? And when you're saying that Maharashtra grew around 10% and Africa grew 20 plus percent. Maharashtra is a part of PDM overall, but overall we have grown by 13.5%.

20:25 No, no, I understand that. Because from almost it is flat, but in Africa and India together we have grown more than 13%. No, no, I understand that. India we have grown only 3%. Yes, standalone only 3% Praveen. No, no, I understand that. I'm saying that ex OSAM, I mean, last year, Q1 FY 'twenty six did not have OSAM, right? Then your procurement was around 18.7%, correct, around, right? And this year, if I take... I'll tell you the breakup Praveen, just give a minute. So out of eighteen point seven months, the current year we have done 21.13. The breakup is for Dodla Dairy India 16.75, now increased to 17.23. Percent, that is 3% of growth. Then overseas from 1.96% to 2.52%, that is 28.5% of growth.

21:16 For HR goods, last year we don't have it. Now we have 1.39% LPD. So the overall growth comes to 13%. No, no, understand that. I'm saying if from the 21.1%, if I take out OSRAM one quarter 1.39%, you receive it around 19.7%, correct? Exactly. Right? So that 19.7, I'm comparing it to the last year, 18.7. Right? I think that is a growth of 5.3%, which has more income from Maharashtra and Africa looks like. Right? My question followed by Maharashtra. Yeah. Yes. So so the... Hence, my question was that, does it mean that the other geographies like Karnataka, Andhra, and others have been degrown during this time in terms of procurement?

22:02 It's not de grown, it's maintained the same because it's again the summer months of the growth. Okay. And do you expect this kind of a trend to continue where you don't expect much of a growth from the existing geographies and largely Africa, Maharashtra and Bihar is what will drive? So basically what happens is also what we play with pricing because sometimes with the pricing of the particular states in comparison with other states are lower or higher, we try to manage as a blend of all the states procurement. For example, Andhra is becoming more competitive and the prices are going higher. There we are not expanding capacities or improving and waiting to see if it can be the pricing is going too high. In certain areas where the pricing is more conducive to us because of our transport and being closer to the places where we operate, we enhance that.

22:52 So it's a blend of what we do also that plays into the role. Okay, understood. Thanks. Thanks for the response. Thank you. Participants in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Anirud Joshi with ICICI Securities. Please go ahead. Yeah. Thanks. Thanks for the opportunity. And, two questions. So can we largely assume that the worst in terms of margins is largely behind? And in a way, from here on, either there should be stability or there should be a recovery depending on the milk propellant prices.

23:44 Also, have we largely passed on the entire increase in propellant prices as well as fuel prices increase via selling price hikes or still we need to take some round of further price hikes? And then second question on the balance sheet, we have seen there is a drastic increase in goodwill and intangibles of almost $2.50 odd crores. So I guess it's related to some acquisition. So any plans for writing it off? And if the if it is a return off, is there any tax benefit available on that? Yes. Thanks. So the first question, BBK will answer regarding our margin profile, what we had asked for. And I think the balance sheet, BBK sorry, Mudli will answer it. Yes, sir. Yes, I mean, see Africa, have done whatever procurement hike was there, it's a bit compensated with the sales increase also.

24:46 That is number one. And Argo also what we have done slightly already 70%, 80% raw material price increase versus sales price correction we have already done it. Only in Dodla Dairy also, we waited till July first week because normally from July onwards procurement goes up normally prices will come down. So this year, it has not happened. That's why now we have already done corrections, mostly from fifteenth onwards. And most of the corrections are done. We are very confident that we'll get back to the same old last year, like 7% to 8% margin profile. Yes. With regard to the tangible, so basically from like OSRAM, we have INR100 crores of goodwill is there. Apart from that, around INR150 crores of branding is there. So based on that, we have allocation impairment of whatever it is there. But it is a standard fair value of amortization.

25:40 There is no any surprises of reduction in the fair value. So therefore, we will not be providing anything for write offs in the impairment of assets. And correct, Vivek was saying, we expect that the worst is behind us in terms of the procurement prices coming to a power of the stability. I don't think they'll further increase dramatically, marginal corrections might happen, but we will have to take it in the correction to the consumers. Okay. Sure, sir. Sure, This is very helpful. Just last question from my side. We have seen many players, especially in South India, are focusing very aggressive on ice cream segment and are setting up large plants also. So considering the investments and the growth in ice cream segment, there is a possibility that there is a solid growth in the industry.

26:34 So what will be Dodla Dairy's stance on, in a way, participating in the growth possibility for ice cream as a industry? And if yes, what will be the CapEx or the investment plans on that? Yes, that's it from my side. Many thanks. Thank you, Amit. Right now, we don't have any plans of a major ice cream expansion as a capital expansion. We have also seen reasonably good traction in our ice cream volumes, which thankfully due to summer have done very well for us. I think we still have some leftover capacities because we can also produce ice cream previously during the season to stock for selling during the peak summer seasons. So we are waiting to see how it pans out for us in the current year. And maybe such the decisions will be made not currently, but hopefully in the future. So our growth has been from INR16 crores to INR22 crores in the first quarter itself.

27:25 So we think once we see this year panning out and then we'll make plans. Currently, we do not have any plans for major expansion. Thank you. The next question comes from the line of Darshita Shah with DSP Asset Managers. Please go ahead. Yes. Thank you for the opportunity. My first question is regarding the quantum of the price hikes. PVK, sir, you mentioned we have done some corrections through July 15 onwards. If you could just mention the quantum or the INR 2 price hike we took last quarter, how much incremental price hike we've taken now? So I think from the Q1 to Q1, if you compare the price increases, we have done an average price increase in Dodla of almost 2% increases in the consolidated Dodla being around 1.4% and Africa being around 4%. I think currently we'll look at another around 2%, 2.5% correction in the prices in the ongoing quarters that we look at. So effectively, I think currently we will get the 4%, 5%.

28:31 The 2.2% is in Sanddund, Dodla or Africa and Dodla put together? The total represents all put together. Dodla alone was around 1.4% currently, but we think we will take another two to 2.5% there. Prashanth, this is only milk realization price we are talking, they are not the blended. Yes, yes. The And blended will be higher because ghee and other products we have taken a substantially larger price increase. This is only milk. Got it. Clear. And secondly on the volumes, how do you expect the volume growth to be for the year? First quarter of course you've done quite well, but how do you expect it to be for the full year considering the price hikes that we're taking in?

29:22 We maintain our normal steady things of 8% to 10% in India as volume growth and the price hikes will add to the value growth. So that's what we look at. Okay. So there is no change on the 8% to 10% volume growth number despite the pricing? Yes. Got it. Okay. Great. That's all from my side. Thank you. The next question comes from the line of Yash Goeka with Auriga Capital Advisors LLP. Please go ahead. Hi, sir. Am I audible? Yes, Yash. Go ahead, please. So my question is on pricing. What are the price hikes taken like cooperatives in the region we are operating? And have you seen that cooperatives taking price hikes in Tamil Yes. Price hikes in Tamil Nadu cooperative, Amul has taken a price hike in the Ghee.

30:10 Nandini has taken price hikes in Ghee and the national cooperatives had taken a price hike earlier in Mill. We anticipate also they will also be forced to take price hikes, if not currently in a matter of time. So we are in spite of that, are continuing with our required price hikes that we will have to take. Carbon, we do not know when, but I'm sure they will have to take because the differential is becoming large and we are seeing pressure coming on the ground in terms of their payments to be made to their back end farmers and it's getting delayed there. Okay. And sir, what is your price gap today with these cooperatives? Almost averaging because depending on products or whatever, I think between Tamil Nadu will be the highest with almost more than a INR10 price gap and in Karnataka it might be INR600, INR700 price gap. So those are the only two areas where we have a significantly large price gap for the cooperatives.

31:03 Okay. And sir, my second question would be what kind of price hikes have you taken in the regions where your market share is stronger compared to the ones where your market share is weaker? So basically, in terms of absolute number, it will be around INR 2 price increases that we have taken as a correction across. You. Next question comes from line of Abhishek Mathur with Systematic Groups. Please go ahead. Sir, you've mentioned in the presentation that you expect the 2Q milk procurement cost to normalize in the second quarter. What is leading you to sort of expect this? Is it only the improvement in the milk supply in Maharashtra? Or are there other drivers due to which you are seeing a normalization of milk procurement cost? Also, if you can help with what was the average procurement cost that you saw in the June month? And what is the procurement cost that you saw in the July month also? That's my first question.

32:04 So basically, what we mean by normalization is whatever the price hikes that are taken will maintain the same. We won't see a decline in the procurement prices, what the normalization means. I think the specific numbers in terms of what the price of milk, were almost the same in terms of June and July. I think if you want the specific number of prices that we were... Basically, average is around 41 crores. Now also it's running around INR 41 crores more or less. See, last two months, the month of May, June, July, the total procurement cost is standstill. So it is on the same level. Only we have done the sales correction average INR 2 per liter in health and VAP we have done INR 3 to four correction. Got it, That's helpful. Secondly, just a bookkeeping question, if you can help with the numbers for the Consol overall realization for 1Q, the VAP Consol realization and the stand alone Africa stand alone and Africa realizations all for 1Q, please?

33:09 Minute, Murali will give you those numbers of 1Q for the realization that we have. So overall realization of the mill curve only per liter? No, sir. Overall, console including milk and rap and everything. Yes. Overall console is 62.78%. Last year, current year it was 61.78%, okay, because the bulk was there in the last year. So if you exclude the bulk, last year it is 59.82%, current year it is 61.78%. And for VAPS, sir, VAPS console? VAPS console, it is basically excluding the SaaS, it is 64.11% for current year. Last year, 1.32 Last product, 6.4 is current quarter.

34:03 Last quarter, it is only $4.98. And finally... Pattern. And Only lastly, sir, for stand alone and for Africa, what are the realizations? I will give you the stand alone. You see Africa, Kenya and Uganda, average relation is 65. So last quarter to this quarter, no, I'll give a comparison. So last year, if you see, you went down, we were at 59.36% and this quarter, 5.31%. And similarly, even in Kenya also, we were at 58%, now 65 Got it, sir. And finally for stand alone? Stand alone, overall excluding the bulk product is 59.99 to 61.36 for the India standalone and overall including the past product it is 59.90 to 60.88.

35:03 And including the bulk it is 63.24 of last April, 60.88 of current year. The next question comes from the line of Darshid Vohra with Asset Meta Institutional Equities. Please go ahead. Yes. Hello. Hello, Arjun? Yes, Darshid. Yes. Thank you for the opportunity in Congress and the strong growth in revenues. My first question actually is that if we look at that sales ex of month and then the growth has been somewhat lower when compared to historical growth rates that we've seen. So is there any reason for that? Basically, look, for us, the other apps considered to be as very much smaller, right? The major contribution does come from curve. Even if you see curd slightly increasing, it will be better.

35:55 But I think I'll just check the numbers, but like ice cream and paneer, we have done much better in terms of growth like INR 14 crores last quarter to INR 22 crores this quarter. I think you can expect the specific numbers in VAP minus curd is what we'll And the part and part product, which we reduced it, that is a reduced of 36, okay, in the consumer. And apart from that, we have exited completely from the bulk sale, which was negative. That is around 57 crores, which was there in the last quarter, we don't have done this. So if we incurred when we said current product, it's not only current that we talk there, but we talk of our buttermilk, lassi and other fermented products, which also do well for us.

36:50 All right. All right. Got it. Okay. And secondly, if you look at so you've done increased procurement and you have mentioned that the procurement is not going to slow down from here onwards. So do we see bulk sales coming back? And if yes, what kind of a quantum are we looking at? I think this year, there won't be enough quantity of bulk sales. We will have to be net buyers of commodity required because this is supposedly the first season where we should have seen a surge in volume growth of 20%, 25%, which is not happening and maintaining more of an even keel. With that, I think we don't have much of bulk sales available for this year. All right. All right. All right. Okay. Just final question there. Just wanted the current sales in INR terms for the quarter? Current sales in INR terms for India, including all the current products will be INR 333 crore 0.96 crore the current quarter.

37:48 Right. Does that answer your question, Dodla? Yes. Thank you so much. The next question comes from the line of Resham Mehta with GreenEdge Wealth. Please go ahead. Yes, sir. Thank you. So would you like to I mean, the first quarter consolidated new growth has been very good, right? So would you like to give some revenue guidance for the full financial year, consolidated revenue growth? We will again target the 10% of volume growth and 15% of revenue growth that we keep targeting. We might have minor corrections here and there, but consolidated, we will give the same guidance of 10% of volume and 15% by revenue.

38:37 Right. And can you talk about your stand alone VAP growth in terms of revenues for the last financial year, FY 'twenty six versus FY 'twenty five? And also for the current quarter, which is Q1 of FY 'twenty seven versus Q1 of FY 'twenty six. So you want FY 'twenty five whole year comparison and the current quarter comparison, ma'am? Yes, yes, correct. Yes. I think, would we will give you that in terms of the whole year and the current quarter. He will start with the current quarter. Current quarter India, I'll talk about first. So current quarter growth with regard to the value, it is around 4.9% in the milk and 34% in the current cut products. On the revenues, stand alone revenues, yes, for the said time period.

39:30 So from INR $2.45 crores to INR $3.30 crores, excluding bulk. Sorry. $303,132. 32. $2.45 versus $3.32. Okay. So that's a 36% wrap growth in the stand alone. Right? Okay, okay. Get it. And for FY twenty twenty six versus FY twenty twenty five broadly Yes, you will have the growth yes. So $7.59 crores of last year to current year INR $8.42 crores. These are excluding the deal and better of the either consumer or the bulk. I'm talking about pure one. Products. Consumer deal, last year, we had INR 81 crores.

40:16 It is INR 106 crores. Thank you. The next question comes from the line of Aditya with Securities Investment Management. Please go ahead. Yes. Hi, sir. Thanks for the opportunity. Sir, if I look at your sales volumes, you know, excluding Musam, so they have dropped to now around 5%, which we were growing at around eight, 9% for the last two, three quarters. So this quarter, even after Africa has grown strongly, why is there a drop in milk sales volume? And if you could just split the milk sales volume between India and Africa, how much have they been? So normally, milk sales does not increase much in summers because people use more of the products than the milk itself. And I think in the coming quarters, the milk sales will grow a bit more and keep it as they come back to the normal trends. And also, as our price differences increase in terms of the milk prices, we normally try to sell more of a higher realization milk and not don't push much of a lower realization milk products. I think giving a comparison of what milk was in terms of in absolute terms between Africa and India. Murali will give you the specifics in terms of the meat quantity of Africa and India. Yes. Milk volume, we've done around 10.4 lakh current quarter. Last quarter, is 10.2 lakh. There is a minor increase in the milk like far said that it is a fiscal year of the summer.

41:42 And we delivered the milk of overseas Africa. Last year, done 161,000 as again we done current quarter 214,000 that is around 33% of growth was there in the milk itself. Understood. And also you had mentioned that quarter, they have taken price hikes in ghee and butter, but what about liquid milk? So what kind of price hikes are they taking versus? So basically, think the Southern cooperatives have not taken a price hike. The national cooperatives like Amul and Mother Dairy have taken the price hike. We are anticipating that even the Southern cooperatives should take a price hike, like I said earlier in this earlier question. For example, Avan is facing pressure of not taking the price hike, therefore, not being able to pay on the suppliers on time. And therefore, they will be bound to increase the pressure, which is showing in terms of then I think the newspaper articles, I cannot confirm it, but certain the higher loss making built SKUs, they were not able they were not supplying and that withdrawn certain higher loss making SKUs from the market. So I think with those indicators, we should think that they will also be forced to take a price increase soon.

42:51 Do you think that would sustain us Sorry to interrupt, Aditi. I would request you to rejoin the queue. Thank you. The next question comes from the line of Ankit Shah with White Equity Investment Advisors. Please go ahead. Thank you for taking my question, sir. Sir, for Africa, can you give the procurement volumes split between Kenya and Uganda for Q1? So only for only procurement volume sir. Dodla will give you the procurement volume of Uganda and Kenya. Procurement volume in Uganda, Q1, see one lakh 54,000 it has as the next one lakh 29,000 of previous year. And if see take Kenya and Kenya also last year now we have done procurement only.

43:40 Q1 now 96,000, 97,000 we have done. And last year, we have done 66,000. There is jump of 46% in Kenyan procurement growth. And even though we have done only procurement growth is 19%. Have majorly we have done good growth in Kenya. And sir, what are the utilization level here? Kenya, now we are almost utilizing 80% utilization in Kenya because we have installed capacity is only 1.5 lakhs. Now we're already doing 1.1 lakhs. So hardly we have another 20%, 30% gap. But in Uganda, don't see since because we are targeting yogurt there, we have grown yogurt also good quantity there.

44:28 And that's why now we are planning for greenfield project. Uganda also is a full capacity actually. Right. Sir, you mentioned the realization increased from 58 to 65. So this realization is the blended realization 65 for Q1? And from this, should we see further margin improvement in Q2 as a fallout of this? So I think the first quarter price that we have seen will be there, but as the seasonality comes in procurement prices in Africa also increase in the second quarter. So it will not be a continuous amount of the same, but we will not lose profitability depending on monsoon will taper down and then again bounce back. Thank you. The next question comes from the line of Sukrit Patil with Eyesight Fintrade.

45:17 Please go ahead. Good morning to the team. My first question to Mr. B. Karekti is beyond the regular outlook, what are the top two, three execution priorities we are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in consumer demand shifts or competitive pressures? And how are you preparing to manage them while still strengthening Dodla's position in the dairy products and value added offerings? That's the first question. I'll then check-in with you after this. Thank you. See, if you see overall Dodla Africa, we don't have we have towards edge only. So maybe normally, we do better results in the first quarter and fourth quarter, slightly second and third quarter, slightly down margins. But whatever target, what we have taken a target budget, that we will 100% will achieve as far as Africa is concerned, volume as well as EBITDA. And feed also now we have almost we have done first quarter also more than 25% growth. And the EBITDA levels also now slightly there is a purchase price raw material pressure is there. But even then feed also we are very confident, But just the numbers, both EBITDA and as well as volume both will achieve. And the DDL India also now we have done a lot of corrections. And milk we have done earlier in the month of April, May itself, have done 1 rupee more than 1 rupee correction we have done.

46:35 And then we have already taken two of this correction and wrap we have done INR 3 to four of this correction. So I don't see see there will be always a pressure because I don't say there won't be any pressure, but clearly it is indicating that the impact, weather impact because of that only is the issue. Otherwise, things would have been better. See there is no much of inventory that's why there is a pressure. That's all. Otherwise, price reduction will be yes. No, sorry, sorry, sorry, sorry, go ahead. Yes, that's what I said. Because of the pattern, the procurement and to see the anticipated level, it is not there. That's why there is a pressure, but we have already done a corrections. Thank you. My second question to Mr. Purli is, from a financial point of view, what key risk or challenges do you anticipate in the coming quarter? And what specific measures have been taken to manage margins, cash flow and balance sheet strength, especially in areas like raw milk procurement costs, receivables and regulatory compliance? Thank you.

47:40 Yes. So basically, it is more depends on how much you could able to pass it on the cost inflation to the consumer. It also depends on the planning of the inventory, the procurement and the sales and also how the other competitors are playing in the field. These are the things which we need to have a capture, okay. Based on that we will plan overall the absolute amount we also grow in the EBITDA percentage. That is one thing. And with regard to the cash flow, we are debt free company. We have around INR650 crores in the balance. And we have to see where we get able to optimize the return on capital employed. That's where we are working towards. And now as of now, we are funding internal accrual for the water, for the Africa and as well as for the Maharashtra.

48:28 And we don't have any major issues in the accounts receivable. Basically, is a cash and carry business, okay. Our average DSO is around one point five days to two days. That's what we are doing and payables every fifteen days we will pay to the farmers and all the transport and other payments will do it on a monthly basis. So we don't foresee any issues in the payables or the receivables. On the inventory, based on the movement of the prices increase or decrease on global situation, we play the inventory game. The next question comes from the line of Hitendra Pradhan with Maximal Capital. Go ahead. Hi, sir. Hope I'm audible, and thanks for giving all these details. I just had one question and wanted to get your perspective on the RAP portfolio, especially for Cord and Pony. So sir, what happens to the You're breaking up, sir.

49:22 Hello sir, is it better now? Go ahead sir. Hello? Yes. So just one question on the BAK portfolio. So sir, what happens to the pricing and the working capital situation on the back portfolio in this environment when the procurement is somewhat stretched? I mean terms of pricing, in terms of margin and working capital, if you can give us some color what happens to the VAP portfolio? Yes. You're breaking up a little bit. I'll repeat the question before I give the answer. So one thing is you wanted to see what the WAP portfolio's impact based on the pricing of milk is going to be. And the second is regarding the inventory buildup that will happen in terms of the milk pricing. If that is the two questions, I'll answer accordingly, sir.

50:15 Yes, yes. So basically, the VAP does not mean, the reprocurement prices and VAP transmission has already happened and it has been done. So whatever was the procurement price to the VAP realizations, we have passed on the pricing to the consumer and that will continue to be there. But majority, as you know, VAP will have a higher offtake during season and will come down during the off season. So I think during the off season, as we go in and the procurement prices remain the same and VAP remains the same, the profitability in VAP will continue. Regarding inventory, we still have to wait and watch. I don't think we have sufficient inventory buildup happening for us on our own come for the next year. We might have to end up being a net buyer. It will not affect our working capital as such because we are we don't have any we have our limits, but we don't draw on our limits because we have internal accruals for the P and L 600 crores also post our capital expansion. If required, we will dip into our own reserves for our working capital requirement.

51:09 And I don't think we will need much of working capital requirement because in the same scenario of milk actually evening out and not surging high or low. I think in the coming days, we might see that our own milk procurement because we have built out our infrastructure also for a larger requirement for our new expansion that we are doing. I think we will not be having that much of an inventory build up. Okay. Thank you, sir. Thank you. The next question comes from the line of Abhishek Khaniti with Nevakha Ventures Private Limited. Please go ahead. Hello. Can you hear me? Yes, Abhishek. Yeah. Hi. Hi, sir. Thank you for the opportunity. Actually, I just wanted... I'm new to the...

51:54 I... I'm I'm new to this company. So, like, you know, I'm just trying to understand. So, like, if if we take, like, three years down the line, how would I... How would our portfolio look like, you know, in terms of, like, how would you see Africa percentage of the revenues contribute to the revenue versus like how would you think the VAP would change over the next three years? So yes, these both. And also like agro things. So again, a little bit of breakup, Abhishek. I'm presuming you're saying how is the breakup going to be between the Africa revenue and India revenue in the next two to three years that you are anticipating? I think our average revenue will ultimately contribute around 10% and they will continue to be in the same trajectory of 10% in terms of maintaining it as because the larger pie is the Indian operation. Even a little bit of growth in Indian operation, Africa has to grow substantially large to compensate the Indian growth pie to become more in that. But the 10% in comparison with India growth also means it's a reasonable growth in Africa. That is the reason we are expanding our capacities also in Africa as much as we are doing in India. I think we're growing in tandem with the capital allocation of the expected operational return.

53:04 It will be the same for the next two to three years unless we get some brand new opportunities or acquisitions, which are not there on the horizon, but if something ever happens, it might change. Currently, we maintain the same scenario. So that is where it will be for us. Sir, in the Indian dairy business, how do you see the BAP target? We normally target the same because the base is increasing. We look at it as a 10% of volume and inflation in India has always been around 4% to 5% that keeps adding. So to maintain this 10% by volume is what we have invested in Maharashtra and we have taken over Roshan as a larger scale expansion. So maybe one year or two years, we might drop to 7%, 8% or some years, we might go to 1012% by volume. But 10% by volume is what we target for.

53:53 Just to Thank you very much. Yes, it will be around 70% to 80%. And overseas will be around 15%, also will be around 8% to 10%. That is the direct mix. Thank you, sir. Thank you. The next question comes from the line of Bhavesh Jain with DD Investment Advisors. Please go ahead. Yeah. Am I audible? Yes, sir. Yeah. So, just wanted to ask, India's stand alone business for the past four, five quarters has been in on, mid single digit growth. So just wanted to understand and have your outlook on how do you expect growth from the core markets?

54:39 And how do you how much would you expect from the newer markets of, let's say, Bihar and Maharashtra? So I think our core markets will try to be maintaining our market share more consistently, sir, because our core markets like we explained being, if you look at it from the Karnataka or Tamil Nadu side, the price differential between the cooperatives and other already significant and we don't want to keep pushing it further. And that is why we do more of geographical expansion. It is also proportionate with the correction measures that will be taken by the cooperatives. If the cooperatives do take a significant large price correction that had happened in the previous years. We will also be able to get more market share there and continue with our market share increase. But currently, it is because of the higher we will not get a lot more entry into the Oreka or the local shops because of the price differences. We will try to maintain our market share. Maharashtra will be predominantly a balancing procurement operation for us. We only have a two lakh dealer kind of local market sales that we'll be looking at the local area. Similarly, I don't think Osan will be growing at 100% kind of rate because there also there will be competition.

55:46 So that is the reason of the overall blend that we look at. We will look at a 10% growth in India by volume. The local areas being around maintaining market share would mean 5% to 6%. Newer territories would add more to that and therefore we'll maintain 10%. Got it. Thank you so much. The next question comes from the line of Manish Jain with Qumil One LLP. Please go ahead. Yeah. Hi. Wanted to congratulate you on the great work that you all have done on direct procurement. Fact, that is getting hidden in the numbers that you have shared. So especially the kind of market share gains that you all have done from leading competing dairy companies in the areas you are operating in.

56:34 So really keen to understand how you all are managing to create a very powerful procurement in your areas in India. And what is the share of direct farmer payment that you're doing? Most 100% that we do, Maybe if there is some technical errors, it might be different, but otherwise it's very insignificant on otherwise it's all we can consider it almost as 100% direct farmer payment that we do. And regarding what you said as the strength, I think it is more of the human talent that we have to develop in terms of number of people involved because it's unique in its nature. It's like marketing in the front end of how do you create a brand or an operation. It is similar in the back end. The team makes a lot of to keep the team active, to keep the team more involved is where it goes. And I think in the days to come is also being ahead of the curve in terms of the new things that happened, right? For example, if you look at direct procurement payment, we are another companies who are one of the earlier leaders who went in early and then were able to convert it to all the farmers.

57:41 So I think every time when there is something new that comes, it is being aware and continuing to becoming better at that. I think qualitatively, we have also taken a significant large number of measures of MBRP to be improved. It's more an internal drive rather than external pressure. And as long as that internal drive continues to be there and the team is well focused and stays well, it will continue to grow. And second question attached to this one is, have you seen decline in per animal productivity, which other dairies have also seen? So I think for us, for animal is a different data because we're not able to get significant data tracking animal wise. It depends on regions and certain areas, the animal productivity increases, certain areas it might not. And we are I think we will in the days to come, it is there. But if you look at the farmer average, the farmer average has been increasing steadily over the past decade, it's moved up significantly per farmer production. Animal data is very difficult to pinpoint and predict. But yes, we do hear some states that more the productivity of animal has gone up. And for certain things like initiatives we have taken when we're giving good quality feed, the farmers who are buying feed from, let's say, Dodla Dairy Cotton Feed are doing around 14 liters per farmer as an average, which are non Dodla feed consumer is only able to do around 11 liters per farmer average. So I think these initiatives also help in terms of improving productivity.

59:09 Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks. So 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 Advisers. Thank you very much. Thank you, sir. Ladies and gentlemen, on behalf of Dodla Dairy Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.