Parag Milk Foods Q3 FY24 revenue Grows by 8.8% YoY

Parag Milk Foods Limited (PMFL), a leading manufacturer and marketer of dairy-based branded products in India, announced its unaudited financial result for the quarter and Half year ended 31^st December 2023.

Key Highlights Consolidated Q3 FY24:

• Revenue stood at INR. 8,008.4 million, a growth of 8.8 % YoY

• Gross profit stood at INR 2,107.5 million, with a Gross profit margin of 26.3 %

• EBITDA stood at INR 686.5 million, with an EBITDA margin of 8.6%

• Profit After Tax stood at INR 341.6 million, a growth of 268.8% YoY.

Key Highlights – Consolidated 9MFY24

• Revenue stood at INR. 23,485.9 million, a growth of 12.3% YoY

• Gross profit stood at INR 5,545.4 million, with a Gross profit margin of 23.6 %

• EBITDA stood at INR 1782.1million, with an EBITDA margin of 7.6%

• Profit After Tax stood at INR 807.7 million, a growth of 161.4% YoY.

For Q3FY24, the consolidated revenue from operations grew by 8.8% on a YoY basis, at INR 8008.4 million. The growth came from healthy growth in the ghee and protein category. The softness in the milk prices coupled with improving product mix resulted in sharp expansion in the gross profit margin for the company.  The gross profit margin expanded by 520 bps yearly from 21.1% in Q3FY23 to 26.5% in Q3FY24. The EBITDA grew by 80.5% yoy, with an EBITDA margin of 8.6% for Q3FY24 against 5.2% in Q3FY23.

For 9MFY24, the consolidated revenue from operations grew by 12.3% on a YoY basis at INR 23,485.9 million. The gross profit margin expanded by 450 basis points yoy at 23.6% in 9MFY24 against 19.1% in 9MFY23.  Driven by operational excellence, the EBITDA grew by 52.2% yoy, with an EBITDA margin of 7.6% for 9MFY24 against an EBITDA margin of 5.6% in 9MFY23.

 PMFL consistently invests in enhancing its brand strength by employing innovative marketing activities.  The company has undertaken a series of efforts to expand its overall distribution reach, aiming to triple its reach to more than 15 lac retail outlets.

Commenting on the results, Devendra Shah, chairman, said, “It gives me immense pleasure to state that our consolidated revenues for the quarter have grown by 8.8% yoy, while our margins and profitability have witnessed substantial improvement. The Gross and EBITDA margins have expanded by 520 and 340 basis points to reach 26.3% and 8.6%, respectively.

Over the last two quarters, the milk procurement prices have been benign, and we expect them to remain stable. Improving consumer sentiments coupled with our continuous focus on the value-added products and the health and nutrition segment is anticipated to drive healthy performance.

We are on a transformation journey to drive efficiency across the value chain. With an ensuing expansion and acceleration of the distribution footprint, we are confident to show robust growth in our revenues and profitability.” 

Key developments in Q3FY24

Brand building initiatives- The company has strengthened its brand equity reach by adopting unique content-led impact marketing and branding campaigns. Continuing the momentum of the marketing innovation, the company continued its effective collaboration with Kaun Banega Crorepati (KBC) for the second time. The association has enabled the company to increase consumer connections and strengthen its brand equity.

Procurement:  For the quarter, the average milk procurement stood at 17 lac liters per day; aided by a stable global market and an excellent flush season, the milk prices have stabilized. The average milk price for the quarter stood at INR 32.2 per liter.

Distribution reach: The overall business growth was broad-based, with all channels posting good growth. In line with the targeted initiative of expanding the retail reach and presence, PMFL continues to invest in the sales and distribution (S&D) infrastructure.

9MFY24 business performance

Core categories:  The core categories of Ghee and Cheese have seen continuous traction throughout the period and have posted a growth of 11.1%  Y-o-Y.

New age business- Brand Avvatar: The Direct to Consumer (D2C) brand Avvatar continued its momentum and recorded robust 62.0% growth YoY, led by 45% volume growth YoY. The overall protein portfolio has continued to record market share gains.  

Premium Dairy Business- Pride of Cows (PoC):  In line with the company’s premiumization agenda, Pride of Cows continues to witness healthy traction. The brand is expanding its product portfolio as well as distribution footprint.   During the quarter, the brand was extended into the Vadodara market, which makes it a seven-city brand. Pride of Cows is posting profitable and Sustainable growth.