Parag Milk Foods’ turnover grew by 20% in the second quarter of FY24

Parag Milk Foods Limited (PMFL), a leading manufacturer and marketer of milk-based branded products, has reported its unaudited financial results for the quarter and half year ended September 30, 2023, with a total revenue of ₹ 7,981.6 crore for the quarter. 20.1 percent compared to the previous year.  Despite last year’s high holiday inventory, core categories continued to grow in volume and value, driven by innovative branding and an expanded distribution base.  The stabilization of purchase prices and the improvement of the product range led to an increase in gross margin (GPM) of 220 basis points, which affected EBITDA growth. The EBITDA percentage for the quarter increased by 160 basis points compared to last year and was 7.3 percent. The general business situation remained strong; PMFL’s cash flow from operations was ₹ 489.3 crore in 24 HFY. Innovative brand integration with Kau Banega Crorepati (KBC)  enabled PMFL to expand its strong consumer linkages and distribution. The company has further strengthened its ties by partnering with KBC for the second time, which is likely to lead to better reach in tier 2 and tier 3  cities. 

As a strategic focus area, PMFL will continue to invest in expanding its distribution area and office surplus. Chairman Devendra Shah said, “I am pleased to share 20.1% YoY revenue growth to ₹ 7,981.6 billion driven by volume growth and product premiums. The growth is supported by the company’s good profitability, where our gross margin grew by. 220 basis points and our EBITDA margin at 160 basis points. I am happy to report that the company has a strong cash flow of ₹ 489.3 million in 1HFY24.   He added: “In addition, we expect the pace of growth to accelerate due to the deteriorating input cost environment and good holiday demand. For these reasons, we are confident that we will see a healthy increase in our profitability in the coming quarters as well”. The company has also embarked on a corporate transformation, working with Boston Consulting Group (BCG) to help us unlock new growth opportunities and streamline our operations for long-term sustainability.   Core categories of ghee and cheese saw steady growth during the quarter, growing 6.2 percent year-on-year.  

 Direct-to-consumer (D2C) brand Avatar continued its momentum, registering strong 62.7% YoY growth, leading to 57% YoY volume growth. The entire protein portfolio continued to grow in record market share.  According to the company’s rewards program, the  Pride of Cows brand continues to maintain a healthy hold. The brand is expanding its product range and distribution footprint. The average milk yield for the quarter was 15 lac liters per day; a stable global market with the help of a good red season; milk prices stabilized. During the quarter, the average price of milk was ₹ 35.6 per litre.

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