Parag Milk Foods, a leading manufacturer and marketer of dairy-based branded products in India, announced its audited financial results for the financial year that ended 31 March 2024.

Key Highlights Consolidated FY24:

• Revenue of INR 3,139 Cr; a growth of 8.5 % YoY

• Gross profit (GP) INR 749 Cr, with a GP margin of 23.9 % vs FY23 GP INR 569 Cr 

  GP margin of 19.7%. Overall GP margin expansion of 4.2% YoY.

• EBITDA at INR 222 Cr; with an EBITDA margin of 7.1% vs FY23 EBITDA INR163 Cr,

  EBITDA margin of 5.7%. Overall EBITDA margin expansion of 1.4% YoY.

• Profit after tax at INR 91 Cr is up from FY23 PAT INR 53 Cr, with a growth of 70% YoY.

Key Highlights Consolidated Q4 FY24:

• Revenue from Operations stood at INR 790 Cr.

• Gross profit (GP) INR 194 Cr, with a GP margin of 24.6%

• EBITDA at INR 44 Cr, with an EBITDA margin of 5.6%

• Profit After Tax at INR 10 Cr

Dividend: The Board of Directors has recommended a dividend for the year ended 31st March 2024 of INR 0.5 per equity share (face value of 10/- each) amounting to ~ INR 6 Cr.

Business update

The business performance this year signifies a focus on sustainable, profitable growth. The revenue has crossed the INR 3,000 crore mark on tdue tostantial brand equity and competitive market positioning. The focus on margin expansion continues with an overall GP margin expansion of 4.2% YoY. The performance outlines robust operating cash flows of INR 99 crore for FY24. The Company has bolstered its abilities in the rapidly growing new-age channels like Modern Trade and eCommerce, which have contributed to the overall growth. The Company has capitalized on the benign milk prices and expanded its gross margin profile along with premiumization and improved the value-added product portfolio. The Company continues to invest in brand building, with the overall advertising & promotion spending at 4.2% for FY24 vs 2.5% in FY23.

Core categories: Core categories of Ghee and Cheese have seen continuous traction throughout the year and have posted a growth of 3.5 % YoY.

New age business- Brand Avvatar: Its consumer brand “Avvatar” is consistently growing at 100% CAGR for now two years in a row. The overall protein portfolio has continued to record market share gains.

Premium Dairy Business: In line with the Company’s premiumization agenda- the brand Pride of Cows continues to witness healthy traction. The brand is aggressively expanding its product portfolio as well as distribution footprint and now is present across seven cities. The Company is expanding its Bhagyalakshmi Dairy Farm (100% subsidiary), which supplies exclusively under “Pride of Cows” brand.

Distribution reach: The overall business growth was broad-based with all the distribution channels contributing to the performance. For FY24, the General Trade, Modern trade & eCommerce posted a growth of 3% YoY, 6% YoY, respectively.

Brand building initiatives: The Company has strengthened its brand equity reach by adopting unique content-led impact marketing and branding activities. Some of the recent activities include participation in “Kaun Banega Crorepati” (KBC) – this impact campaign has enabled it to widen its reach in tier 2 and tier 3 towns and cities through strong brand messaging ‘Garv Se Gowardhan’. In keeping with the core theme “Make it amazing” the brand Go Cheese has participated in the content-based shows like India’s Got Talent and has also undertaken very focused print marketing.

Procurement: The average milk procurement stood at 16 lac litres per day; aided by stable global market coupled with good flush season; the milk prices have stabilized. For FY24 the average milk price stood at INR 33.8 per litre.

New Developments

Forayed into Sweets category under brand Gowardhan: The Company has forward integrated into traditional sweet segment under the brand ‘Gowardhan’. Currently it has seven delectable sweets range namely Kaju Katli, Malai Pedha, Kesar Pedha, Kaju Pista Roll, Mawa Gujiya, Mysore Pak, and Malai Modak. With an estimated branded market size of INR 7000-8000 crore, the Indian sweets market presents vast opportunities for growth and innovation.

Expansion in International market: The company plans to incorporate a foreign wholly owned subsidiary (WOS) in Dubai, UAE. This will help the company to expand its reach and build a seamless supply chain operations worldwide to cater the international market.

Devendra Shah, chairman, Parag Milk Foods, said, “It gives me an immense pleasure to state that our consolidated revenues for FY24 have crossed the milestone of INR 3,000 crore; along with improvement in margins and profitability. The Profit after tax for the year was at INR 91 crore, with healthy operating cash flows of INR 99 crore. Over the last few quarters, the milk procurement prices have been benign, and now we expect an upward bias. Despite of tailwinds; we are geared up for improving our margin profile."

He added, "We would continue to enhance our industry-leading R&D capabilities and infrastructure to drive innovation and delight our consumers across the globe. Our forward integration of brand ‘Gowardhan’ into the traditional sweets category is an initiative in this direction. The initial response of the prototype is very positive and encouraging and we aim to target a bigger launch around the festivities. We are inching up on our business process transformation along with driving efficiency across the value chain. With an ensuing expansion and acceleration of the distribution footprint, we plan to incorporate a foreign wholly owned subsidiary (WOS) in Dubai, to cater the international market. With strong foundation in place, we are confident of posting industry leading growth and profitability ahead.”