Milky Mist IPO Surges: Value-Added Products Fuel Growth

Milky Mist is experiencing substantial growth, largely driven by its value-added products. Yoghurt sales have surged by 153% year-on-year, and ice cream revenue share has nearly tripled since FY24. This success is attributed to a strategic shift away from traditional products and increased sales through e-commerce platforms.

The company's post-IPO performance has been remarkable, with its market capitalization nearing Rs 25,000 crore. Milky Mist has maintained strong EBITDA and PAT margins while expanding its geographical reach and product portfolio.

Competitors like Hatsun Agro and Dodla Dairy are facing different challenges. Hatsun Agro reported revenue growth but a slight dip in profit after tax, primarily due to increased milk prices impacting margins. Dodla Dairy saw a revenue increase of 19% but a significant decline in EBITDA and PAT margins due to a substantial rise in milk procurement costs.

Dodla Dairy is attempting to mitigate these pressures by increasing its focus on value-added products like curd and expanding its operations in Africa. The company is also working to improve milk realization rates to better balance procurement costs.

Valuation analysis shows Milky Mist trading at a premium P/E ratio, supported by its high growth and strong returns on equity. Hatsun Agro is priced between its historical median and industry averages, while Dodla Dairy appears relatively inexpensive but requires close monitoring of its margin performance.