Q1 2027 Parag Milk Foods Ltd Earnings Call Transcript
Key Points
- Parag Milk Food Ltd (BOM:539889) achieved its highest-ever Q1 revenue of Rs 945 crores, an 11% year-on-year increase, with 3% volume growth.
- The company successfully passed on the 13% higher milk prices through calibrated price increases and a better product mix, keeping gross margins stable and growing gross profit by 11%.
- The new age business (Pride of Cows and Avataar) grew by 59% year-on-year, now contributing 13% of overall revenue, up from 9% in the prior year.
- Management is confident of breaking the 10% growth benchmark for FY27, citing strong festive demand in upcoming quarters and a robust product mix shift towards higher-value items.
- The company is doubling its cheese production capacity from 60 to 120 metric tons per day, which will also enable a parallel expansion in whey protein generation, tapping into a growing market.
- The recent brand association with the viral show 'India's Got Latent' has significantly boosted brand awareness, with website traffic and Google searches for Avataar increasing by almost 200%.
- EBITDA margin contracted slightly to 7.4% from 7.7% year-on-year, and PAT declined by 20% due to a higher current tax impact.
- Volume in the flagship categories (ghee, cheese, paneer, dahi) declined by 2% year-on-year, primarily due to a transient slowdown in the B2B segment.
- The company is facing high milk prices at Rs. 42 per liter, which are 13% higher year-on-year, and management expects a slight increase in the coming months due to seasonal factors.
- The 'others' category saw a significant 46% decrease in revenue, partly due to a reduction in state incentive income following GST rate changes.
- Management declined to provide specific details on the cost and ROI of the 'India's Got Latent' sponsorship, making it difficult to assess the financial efficiency of the marketing spend.
- The company's operating margins have remained stagnant for several quarters, as the benefit from the higher-margin new age business is being offset by increased milk prices and other input costs.
Ladies and gentlemen, good day and welcome to Parad Milk Foods Limited Q1 FY27 Earnings Conference Call.
(Operator Instructions)
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 signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Brian J. Pena, Head of Investor Relations at Paragmal Foods Limited. Thank you and over to you, sir.
Good day. Good evening, everyone.
And a warm welcome to the Q1 FY27 earnings call of Parag Milk Foods Limited. We are pleased to have you all join us for this virtual meeting. For the meeting today, we have with us our Executive Director, Ms. Akshali Shah our Chief Operating Officer, Mr. Rahul Kumar Srivastav our Chief Strategy Officer, Mr. Ankit Jain and myself
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