Dodla Sunil Reddy says that the priorities are to deepen procurement, improve value-added contribution, strengthen OSAM and progress the Maharashtra project
Dodla Dairy is looking to deepen its value-added portfolio as part of its plans to improve margins going ahead. The company’s medium-term ambition is to increase value-added products contribution to 32 to 34 per cent of revenues, Managing Director (MD) Dodla Sunil Reddy said.
In the annual report for FY25-26, the MD noted that the priorities are to deepen procurement, improve value-added contribution, strengthen OSAM, progress the Maharashtra project and scale East Africa with discipline. The value-added products reported a growth of around 23 per cent in the financial year 2026, excluding bulk volumes,
He added that the category continues to be shaped by seasonal variations, particularly in products such as lassi, buttermilk and ice cream, but the structural direction remains positive, supported by curd, paneer, ghee, yoghurt and milk-based sweets. During the year, paneer continued to scale from a small base, curd sustained its momentum and the company expanded the portfolio with masala paneer, milk cake, chocolate soan papdi and new ice cream variants.
“These additions are consistent with our strategy of widening the branded portfolio, improving the value captured per litre of milk, and participating more deeply in consumption occasions beyond liquid milk,” he emphasised.
For the company, sales of value-added products have more than doubled over the past few years. VAP sales rose from Rs 587.8 crore in FY22 to Rs 1,257.2 crore in FY25. However, the sales came down to Rs 1,199.6 crore in the last fiscal year.
Investments And Key Focus
The MD shared that the Maharashtra integrated dairy plant near Solapur progressed in line with plan. Of the total project outlay, Rs 1,060 million has been invested cumulatively, with Rs 200 million in 2024-25 and Rs 860 million in 2025-26, The company is targeting commercial operations by the end of 2026-27.
The initial product focus will be SMP and butter, followed by the progressive addition of value-added capacity and cattle feed. The MD added that in Eastern India, OSAM gives the company an operating platform in Bihar and Jharkhand.
“The immediate priority is to improve operating efficiency, rationalise products, strengthen procurement and progressively align the business with Dodla’s wider standards of quality, cost and distribution. This should make OSAM a more meaningful contributor as integration deepens,” he emphasised.
In East Africa, the business delivered its highest-ever annual Ebitda in the last fiscal year. The MD pointed out that the two markets, Kenya and Uganda, have different volume and margin characteristics and each is being managed in line with local consumption, sourcing depth, regulatory conditions and competitive intensity
The MD highlighted that while the business continued to strengthen across procurement, processing, product mix and market reach, the dairy industry faced a tighter milk supply cycle, with procurement costs remaining elevated through a large part of the last fiscal.
