Revenue of India’s organised dairy industry will rebound by 12% this fiscal to Rs 1.6 lakh crore, compared with a decadal low growth of 1% last fiscal, riding on strong demand recovery in most value-added dairy products (VAP), steady liquid milk sales, and retail price hikes during the fiscal, according to Crisil Ratings.
The rating agency said that the steady demand for both VAP (around one-third share of organised sector sales) and liquid milk (around two-thirds share) is likely to lead to 5-6% growth next fiscal, too, in line with the pre-pandemic trend. More potential retail price hikes provide further upside. Operating profitability, however, will be set back to the pre-pandemic level of 5-5.5% in the next two fiscals — from the peak of 6% seen in fiscal 2021 — because of high raw milk prices, along with higher transportation and packaging costs, and despite dairies increasing retail product prices by 3-4% across categories this year.
While milk availability has increased in the ongoing flush season, but it is still not sufficient to meet the healthy demand for VAP, leading to high raw milk prices. That being said, better revenue growth and near-stable operating profits, along with well-managed balance sheets, will lead to a ‘stable’ credit outlook for dairy players.
Read more at:
https://economictimes.indiatimes.com/news/economy/agriculture/dairy-industrys-revenue- to-rebound-12-this-fiscal-to-rs-1-6-lakh- crore/articleshow/89825390.cms?utm_source=contentofinterest&utm_medium=text&utm_cam paign=cppst
