Parag Milk Foods achieves growth in core categories and improved margins amidst soft raw material prices
Parag Milk Foods has revealed its unaudited financial results for the quarter ending 30 June 2024. The company has reported robust growth figures, showcasing its strong market presence and effective strategies.
In Q1 FY25, Parag Milk Foods recorded a consolidated revenue of Rs 758 crore, marking a 1 per cent year-on-year (YoY) growth. The company’s gross profit stood at Rs 204 crore with a margin of 26.9 per cent, reflecting an increase of 550 basis points (bps) YoY. EBITDA was reported at Rs 61 crore, with a margin of 8.1 per cent, up by 160 bps YoY. Notably, the profit before tax (PBT) saw a substantial rise of 77 per cent YoY to Rs 27 crore, while the profit after tax (PAT) also increased by 27 per cent YoY, reaching Rs 27 crore.
The company experienced strong double-digit volume growth of 10 per cent YoY, driven by healthy expansion in its core categories. Specifically, Ghee, Cheese and new-age businesses showed significant volume growth of 15 per cent, 12 per cent and 51 per cent YoY, respectively.
According to the latest IMARC report of 2024, Parag Milk Foods’ flagship brand, Gowardhan Ghee, has achieved an improved market share of 22 per cent in the branded cow ghee segment. Simultaneously, the ‘Go Cheese’ brand maintained a steady 35 per cent market share in the cheese category.
During Q1FY25, average milk prices were recorded at Rs 31 per litre, a decrease of 16 per cent YoY. The company managed approximately 15.5 lakh litres of milk per day. This reduction in raw material costs contributed to an improved gross profit margin (GPM) of 26.9 per cent, up by 550 bps YoY from 21.4 per cent in Q1 FY24, driven by favourable milk prices and a better value-added product mix.
Commenting on the performance, Devendra Shah, Chairman of Parag Milk Foods said, “We have delivered double-digit volume growth across our core categories during the quarter, reflecting our brand strength and enhanced consumer reach. Our flagship brand, Gowardhan Ghee, has seen a 2 per cent improvement in market share, now commanding 22 per cent in the branded cow ghee segment. The trusted Go Cheese brand enjoys a strong and steady market share of 35 per cent in the cheese market. The company has delivered a 550bps expansion in its gross margins and remains focused on sustainable profitable growth.”
Shah also highlighted the company’s focus on product innovation through its strong R&D capabilities. The recent entry into the traditional sweets category under the Gowardhan brand has been well received and is expected to see a full launch during the festive season. He concluded by affirming the company’s commitment to strengthening its foundation and aiming for exponential growth towards achieving a Rs 10,000 crore turnover target.
