Parag Milk Foods Ltd

Financial Performance

• Q1 FY27 revenue: INR945 crores; 11% YoY value growth; 3% volume growth.
• EBITDA: INR70 crores; YoY +6%; EBITDA margin 7.4% vs 7.7% last year.
• PAT declined 20% due to current tax impact; PBT broadly flat.
• Milk price: INR42 per litre; +13% YoY; flat sequential.
• Gross profit: INR258 crores; +11%; gross margins remain stable.
• Flagship categories (ghee, cheese, paneer, dahi) contribute 61% of Q1 revenue.
• Go Cheese market share: 35%; ranked #2 in cheese category in India.
• New age brands Pride of Cows and Avvatar grew 59% YoY; ~13% of revenue.
• Cheese capacity to double from 60 to 120 MT/day in 1.5 years.

Operating Update

• Flagship volume declined 2% YoY; B2C growth offset by B2B decline.
• New age Avvatar growth driven by volume; includes whey, bars, ready-to-drink.
• Avvatar coffee launched with 15 grams protein per serving; positive response.
• Distribution expansion: aim to be available in more than 1.5 million outlets in 3 years.
• India's Got Latent campaign generated over 80 million unique reaches across YouTube and Netflix.

Projects and Capex

• Cheese capacity expansion: 60 MT/day to 120 MT/day; targeted by Mar-2028.
• Expansion supports whey protein generation; broader health-nutrition portfolio.
• Renewable energy: Tata Solar Power collaboration; last reported investment INR4.6 crores.
• Farm energy: biogas from 5,000 cattle used for on-site power.

Guidance and Outlook

• Full-year revenue growth expected to be more than 10% YoY.
• Milk prices expected to be stable; mild uptick possible with monsoon; pricing calibrated.
• Demand supportive from monsoon and festive period for value-added categories.
• Distribution target: >1.5 million outlets over the next 3 years.

Q&A Highlights

• Management expects FY27 revenue growth to exceed 10% despite muted Q1.
• Avvatar growth is volume-led; price increases are moderate, not 100% everywhere.
• Distribution expansion and outlet reach remains a priority; 1.5 million outlets goal.
• Cheese capacity expansion to 120 MT/day by Mar-2028; milk procurement ramp planned.
• Blended margins driven by cost-push pass-through; ongoing calibrated price increases.

Meeting Details

• Date: August 12, 2026.
• Event/Organizer: Emkay Conference.
• Meeting type: One-on-One / Group.
• Mode: Physical; Location: Mumbai.
• Purpose: Investor interaction at Emkay Conference.

Meeting Details

• Call date: August 7, 2026.
• Event: earnings conference call for Q1 FY2026-27 with investors and analysts.
• Format: audio recording of the earnings call.
• Company participant: Company Secretary & Compliance Officer.
• Availability: recording on the company website under Investors > Presentations > FY 2026-27 > Q1 Apr-Jun.
• Quarter ended: June 30, 2026.

Issue Overview

• Type of issue and securities: convertible warrants on a preferential basis.
• Total size status: no undersubscription or revision observed.
• Main objectives: debt reduction, working capital, capital expenditure, general corporate purposes.

Utilisation of Proceeds

• Utilisation as disclosed; no deviations observed.
• Debt Reduction: partially utilised; end-quarter 17.50 crores.
• Working Capital: partially utilised; end-quarter 7.80 crores.
• Capital Expenditure: partially utilised; end-quarter 5.00 crores.
• General Corporate Purpose: partially utilised; end-quarter 10.00 crores; 0.30 during quarter.
• Unutilised funds: none remaining; funds deployed by quarter end.
• Delays: allocations ongoing within 12-month target.

Governance and Compliance

• Approvals: management undertaking and statutory auditor certificate; EGM notice with corrigendum issued.
• Material events: no material adverse events reported; no regulatory actions disclosed.
• Other: no conflicts noted; MA presents objective view based on issuer data.

General Corporate Purpose (GCP)

• GCP utilisation: 10.00 crores used; 0.30 crores in the quarter.
• GCP items include debt reduction, working capital, and general corporate purposes.
• Board approval for allocation not explicitly stated in MA comments.

Utilisation of funds raised

• No deviation or variation in utilisation of funds raised via convertible warrants through June 30, 2026.
• Funds raised: INR 40.30 crore on May 23, 2025, monitored by India Ratings & Research.
• Original allocations total INR 40.30 crore across debt reduction, working capital, capex, and general corporate purposes.
• Utilised amount as of June 30, 2026: INR 40.30 crore; deviation: Nil.
• Audit Committee and Board reviewed the statement; no comments from auditors or committee.
• Monitoring agency: India Ratings & Research Private Limited (IRR).

Business Overview

• Flagship categories (Ghee, Cheese, Paneer, Dahi) remain core to revenue.
• New Age brands Pride of Cows and Avvatar grew 59% in Q1FY27.
• New Age contributed 13% of total turnover.
• Cheese capacity expansion approved: 60 MT to 120 MT.
• Route to market expanding via D2C, e-commerce, and HoReCa across 8 cities.

Key Operational Highlights

• Q1FY27 revenue ₹945 Cr; 11% YoY growth.
• EBITDA ₹70 Cr; margin 7.4%.
• PAT ₹22 Cr; PAT margin 2.3% due to tax impact.
• New product: RTD Protein Cold Coffee launched.
• Avvatar partnership with Samay Raina show; CFO appointment announced.

Financial Performance

• Consolidated revenue ₹945 Cr; gross margin 27.3%; gross profit ₹258 Cr.
• Standalone revenue ₹920 Cr; EBITDA ₹68 Cr; PAT ₹25 Cr.
• FY26 cashflow from operations ₹149 Cr; EBITDA ₹310 Cr; PAT ₹141 Cr.
• Net debt/Equity 0.4x; net debt ₹484 Cr; ROCE 13.9%; ROE 11.8%.

Capital Structure & Liquidity

• Net debt/Equity at 0.4x, net debt ₹484 Cr (FY26).
• Operating cash flow for FY26 stood at ₹149 Cr.

Strategic Priorities & Outlook

• Strategic priorities: strengthen flagship categories; grow New Age brands; evolve route to market; drive financial growth.
• New Age brands positioned for premium, high-margin growth.
• Cheese capacity expansion supports broader protein portfolio development.
• Emphasis on D2C, e-commerce, and rapid distribution broadening.

Risks & Mitigation

• Milk price inflation mitigated via calibrated price increases and mix optimization.
• Q1 PAT impacted by higher current tax; ongoing tax considerations remain.

Governance & Leadership

• Rakesh Kothari elevated to Chief Financial Officer and KMP.
• Akshali Shah recognised in Fortune India's Most Powerful Women in Business 2026.

Capacity expansion

• Board approves doubling cheese capacity from 60 to 120 MT/day; capex ₹105 crore funded by accruals and debt.
• Completion targeted by FY28.

Leadership change

• Rakesh Kothari appointed CFO and KMP effective August 7, 2026.

Q1 FY27 financial results

• Revenue ₹945 crore, up 11% YoY; volume growth 3%.
• Gross profit ₹258 crore; gross margin 27.3%.
• EBITDA ₹70 crore; EBITDA margin 7.4%.
• PBT ₹29 crore; PAT ₹22 crore, down 20% YoY.
• New Age revenue ₹118 crore, up 59% YoY; 13% of turnover.
• Flagship revenue 61% of total.
• Milk prices inflation 13% YoY; sequentially flat.

CFO appointment

• Appointed Mr. Rakesh Kothari as CFO & KMP, effective Aug 7, 2026; term not specified.
• Profile: MBA; 25+ years in finance; currently President - Finance & Accounts since Aug 18, 2025.
• Reason: appointment supported by Nomination & Remuneration Committee and Audit Committee.

Interim CFO cessation

• Cessation of Interim CFO duties effective Aug 6, 2026 close of business.
• Continues as Managing Director and KMP.

Meeting Details

• Meeting on August 6, 2026 to consider unaudited standalone and consolidated results for quarter ended June 30, 2026.
• Time and venue for the meeting are not disclosed.

Key Agenda Items

• Unaudited standalone and consolidated financial results for quarter ended June 30, 2026.
• Update on closure of trading window.

Other Notes

• Trading window closed from July 1, 2026 to August 10, 2026.