Hyderabad-based Dodla Dairy, a company specialising in processing and distributing milk and dairy products, is targeting a 25% increase in sales volume to average 20 lakh litre per day from around 16 lakh litre currently.

In an interview with CNBC-TV18, Sunil Reddy Dodla, Managing Director said Dodla Dairy wants to go into growth mode and will begin by acquiring land to start a larger facility in Maharashtra. The plant will take about 12-18 months to come on stream, he added.

Dodla is confident of keeping revenue growth at 12-15% in the fourth quarter.

The company reported a healthy third quarter performance with gross margins expanding nearly 470 basis points year-on-year (YoY) to 30%. Revenue grew 10.6% YoY to around ₹747 crore and EBITDA (earnings before interest, tax, depreciation, and amortisation) margin expanded to 11.1% from 7.9% in the same quarter last year.

The contribution from value added products improved to 25.6% of overall dairy sales from 23.1% last year. Dodla expects this to further improve to 28% gradually.

The company is also focusing on overall brand improvement and procurement enhancement on the backend as part of its expansion strategy. The target is to increase advertising spends from 0.4% of sales to 1-1.2% over next one year, Dodla pointed out.

Talking about the expansion plans, Dodla said after acquiring Sri Krishna Dairy, the company has entered Goa. “Once the Maharashtra plant starts in the next 12-18 months, we may not cover the entire state initially. We will begin with areas surrounding Solapur as our marketing base and deepen our presence in Andhra and Telangana. In Telangana, we are currently the weakest, but we plan to concentrate on making it stronger,” he said.

The company currently has a market capitalisation of ₹5,766.63 crore. The stock has gained 93% over the past year.

Source : CNBC TV 18 Jan 30th 2024