Parag Milk Foods reported mixed Q1FY27 results with consolidated net profit declining 20.05% to ₹22.05 crore compared to ₹27.58 crore in the corresponding period last year. According to the company's earnings announcement, revenue from operations increased 10.93% to ₹944.57 crore from ₹851.52 crore in the year-ago period. The company achieved overall volume growth of 3% for the quarter, with the modest growth mainly attributed to lower volumes in flagship categories while the new age portfolio demonstrated strong double-digit growth. EBITDA improved by 6% year-on-year to ₹70 crore, though EBITDA margin contracted by 30 basis points to 7.4% in the June 2026 quarter. Profit before tax stood at ₹29 crore, up 0.4% YoY.
The Flagship categories comprising ghee, cheese, paneer and dahi contributed 61% of total revenue but faced challenges with 2% YoY decline in volumes due to transient slowdown in specific channels. Despite this decline, the flagship categories delivered value growth of 10% and maintained their dominant revenue contribution. The New Age Business, comprising Pride of Cows and Avvatar, demonstrated exceptional performance with revenue of ₹118 crore, recording robust 59% YoY growth. This segment's contribution has increased to 13% of overall turnover, highlighting the company's successful diversification strategy. The company successfully mitigated the impact of milk prices rising 13% YoY through measured price increases and a better product portfolio, with gross margin sustained at 27.3%.
The company's Board of Directors has approved a significant cheese manufacturing capacity expansion from 60 metric tonnes per day to 120 metric tonnes per day through a brownfield expansion. This investment involves an estimated capital expenditure of ₹105 crore to be funded through a mix of internal accruals and debt. As reported by the company, the expansion is part of its strategy to cater to growing demand in cheese and whey protein business and spot new growth avenues. The expansion was approved at the board meeting held on August 6, 2026, and is expected to complete by FY28.
According to IMARC Group data cited in the announcement, the Indian cheese market is expected to grow from approximately ₹129 billion in 2025 to around ₹620 billion by 2034. As per Business Standard, Akshali Shah, Executive Director of PMFL, noted that performance was impacted by sustained inflation in milk procurement prices and elevated input costs across the dairy value chain. Despite these headwinds, he emphasized the resilience of the business model and continued consumer trust. Looking ahead, the company is encouraged by prospects of improved milk availability supported by a favourable monsoon, along with the seasonal demand uplift typically witnessed during the festive period.
