Parag Milk Foods Posts 121% YoY Jump In Net Profit To Rs 251.9 Mn In Q2FY24
Parag Milk Foods, a manufacturer and marketer of dairy-based branded products on Thursday reported a 121.1 per cent year-on-year (YoY) rise in its net profit at Rs 251.9 million for the quarter ended on 30 September 2023.
The festive momentum started strong with healthy demand across the segments. The total revenue for the quarter stood at Rs 7,981.6 million registering a growth of 20.1 per cent YoY.
Despite the high festive base of last year, the core categories continued to post healthy volume and value growth driven by innovative branding and an expanded distribution base.
Stabilising procurement prices, along with improved product mix resulted in a 220 basis point expansion in the gross profit margin (GPM); which percolated down to EBITDA margin expansion as well.
The EBITDA margin for the quarter expanded by 160 basis points YoY and stood at 7.3 per cent. The overall business health remained strong; with PMFL posting a healthy Cash Flow from Operations of Rs 489.3 million for 1HFY24.
The innovative brand integration with Kaun Banega Crorepati (KBC) has enabled PMFL to gain strong consumer connections and expand distribution reach. The company further strengthened the ties, by collaborating for the second time with KBC and is likely to result in better reach in tier 2 & tier 3 towns & cities. As a strategic focus area, PMFL continues to invest in expanding its distribution reach and outlet overage, the media release said.
Devendra Shah, Chairman said, “I am delighted to share a healthy revenue growth of 20.1 per cent YoY to INR 7,981.6 million led by volume growth and our product premiumization drive. This growth is supported by healthy business profitability; wherein our Gross and EBITDA margins have expanded by 220 and 160 basis points respectively. It gives me pleasure to share that for the 1HFY24, the business has posted a strong Cash Flow from Operations of INR 489.3 million.”
Further, on the back of a softening input cost environment and with good festive demand the company expects the growth momentum to accelerate. “Given this backdrop, we are confident to show healthy growth in our profitability in the coming quarters as well,” he said.
Core categories: Core categories of Ghee and Cheese have seen continuous traction throughout the quarter and have posted a growth of 6.2 per cent YoY.
New age business- Brand Avvatar: The Direct to Consumer (D2C) brand Avvatar continued its momentum and recorded robust 62.7 per cent growth YoY, led by 57 per cent 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 premiumisation agenda- the brand Pride of Cows continues to witness healthy traction. The brand is expanding its product portfolio as well as distribution footprint.
Distribution reach: The overall business growth was largely 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
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 its consumer connection and strengthen brand equity.
Procurement: For the quarter, the average milk procurement stood at 15 lac litres per day; aided by a stable global market coupled with a good flush season; the milk prices have stabilized. For the quarter the average milk price stood at Rs 35.6 per litre.
