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Dodla Dairy Eyes 15% Revenue Growth Post-Osam Acquisition
31 Jan
Summary
- Dodla Dairy expects FY26 revenue guidance to reach 14-15%.
- Osam business acquisition is projected to yield ₹500-600 crore long-term revenue.
- EBITDA margins are anticipated to recover to 8-9% in upcoming quarters.
Dodla Dairy has revised its revenue guidance for fiscal year 2025-26 (FY26) upwards to 14-15%, driven by consistent core demand and the integration of its recent Osam business acquisition in Africa. The Osam unit is a significant growth driver, with management targeting substantial revenue of ₹300 crore in the short term and ₹500-600 crore over the longer term. Initial EBITDA margins for Osam are around 1-1.5%, with a goal to reach 5-6% within a year.
Despite facing elevated milk procurement costs due to supply tightness, Dodla Dairy expects its EBITDA margins to rebound to the 8-9% range in the upcoming quarters. The company has factored in summer pricing and is considering calibrated price increases based on weather patterns and the El Niño forecast. In the October-December 2025 quarter, revenue grew by 13.7% year-on-year to ₹1,025 crore, though EBITDA saw a 17.3% decline to ₹79.2 crore, impacting margins to 7.7%.
Further growth is anticipated from an increased contribution of value-added products, improved utilization at its Orgafeed animal feed business, and new production capacity set to come online in Maharashtra by early FY27. The Orgafeed business, currently at 50-55% capacity utilization, is expected to increase its revenue to ₹400 crore in the medium term as utilization rises to 80-90%. The Maharashtra expansion involves a capex of ₹280 crore, with production commencing in early FY27.
