Recently I came across Parag Milk Foods (NSE – PARAGMILK).
The company claims to command 35% market share in the cheese category and 22% in branded cow ghee segment.
It came to my notice because it announced a preferential allotment of warrants to Promoters and Non-promoters at a price of Rs 179.10/- per warrant.
The non-promoters include marquee investors like Mr. Utpal Sheth and company’s employee Mr. Ankit Jain.
Below, we have shared notes from the Q4 FY 25 concall of the company to understand management’s views regarding the outlook for the business.
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Parag Milk Foods – Q4 FY 25 concall notes
Source: Parag Milk Q4 FY 25 presentation
Strategic Overview:
- FY25 marked a milestone year, reflecting strong fundamentals, brand equity, and disciplined execution
- The company is transitioning from a traditional dairy business to a nutrition-enriched, protein-led FMCG platform
Macro & Market Context:
- India contributes 23% to global milk production; dairy market estimated at Rs 10 lakh crore
- Consumer shift toward branded, value-added, health-focused dairy products is accelerating organized retail penetration
- Milk production is growing at a 7% YoY rate
Financial Performance:
- Q4 FY25:
- Revenue: Rs 918 crore (+16% YoY), driven by 13% volume growth
- PBT: Rs 33 crore (+141% YoY); PAT: Rs 26 crore (+167% YoY)
- FY25 (Full Year):
- Revenue: Rs 3,432 crore (+9% YoY); Volume growth: 10%
- EBITDA: Rs 293 crore (+30% YoY); EBITDA margin: 8.5% (+130 bps)
- PAT: Rs 119 crore (+31% YoY)
- Net cash from operations: Rs 212 crore; used Rs 120 crore for capex and Rs 80 crore for interest
Operational Highlights:
- Milk procurement: ~15 lakh litres/day at ₹37/litre (Q4 average), +12% YoY
- Procurement mix: ~2/3 via aggregators, ~1/3 via 300+ own chilling centres
- 5 lakh+ farmers connected; strong rural supply chain under a direct procurement model
Business Segment Performance:
- Core Categories (57% of revenue):
- Ghee, cheese, paneer grew 17% in volume
- Gowardhan Ghee: 22% market share – #1 in branded cow ghee
- Go Cheese: 35% market share – near top rank
- Ingredient Business (17% of revenue):
- Primarily SMP; consciously de-emphasized due to low margins (de-grew 9% in Q4)
- Liquid Milk (10%):
- Steady contributor; limited strategic focus
- New Age Business (6%):
- Avvatar (Whey Protein): 41% growth YoY; e-commerce share ~60%.
- Pride of Cows: Farm-to-home premium dairy; nearly EBITDA breakeven. Present in 7 cities with 5,000+ cows and 2,000 acres of silage land
Forward-Looking Priorities:
- Sustain financial momentum with an aspirational revenue target of Rs 10,000 crore in 4 years (~18–20% CAGR)
- Annual routine CAPEX: Rs 40–50 crore
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