Core dairy categories and new-age brands drive strong volume growth; margins impacted by milk inflation
Parag Milk Foods reported its highest-ever quarterly revenue in Q3 FY26, with consolidated revenue rising 14 per cent year-on-year to Rs 1,013 crore, driven by 8 per cent volume growth and strong performance in value-added dairy products.
However, profitability remained under pressure due to higher raw milk prices. Ebitda declined 3 per cent year-on-year to Rs 77 crore, while Ebitda margin narrowed to 7.6 per cent from 9.0 per cent a year ago. Reported profit after tax (Pat) fell 18 per cent to Rs 30 crore. Adjusted for exceptional items, Pat stood at Rs 35 crore, down 2 per cent.
Gross profit increased 9 per cent to Rs 262 crore, but gross margin contracted to 25.9 per cent from 27.2 per cent last year as milk prices rose sharply.
For the nine months ended December FY26, revenue rose 14 per cent year-on-year to Rs 2,872 crore, with Pat up 11 per cent to Rs 103 crore. Adjusted Pat for the period grew 17 per cent to Rs 109 crore.
Core Dairy Categories Lead Growth
The company’s core categories ghee, cheese and paneer, reported12 per cent volume growth and 21 per cent value growth during the quarter. Gowardhan Ghee holds a 22 per cent share of the branded cow ghee segment, while Go Cheese has a 35 per cent market share in cheese, the company said.
Its new-age business, comprising Pride of Cows and Avvatar, recorded 123 per cent year-on-year growth in Q3 and crossed Rs 100 crore in quarterly revenue for the first time. The segment contributed 9 per cent of total revenue in the nine-month period, up from 6 per cent a year earlier.
Avvatar, the company’s sports nutrition brand, has grown sixfold over the past three years (nine-month comparison). A newly introduced protein wafer bar accounted for 8 per cent of Avvatar’s brand revenue in the quarter.
Milk Inflation Weighs On Margins
Average milk procurement prices rose about 20 per cent year-on-year and 6.5 per cent sequentially during the quarter, reaching around Rs 40 per litre. Despite the cost pressure, the company maintained sequential gross margins at 25.9 per cent versus 25.8 per cent in Q2 through pricing actions and product mix improvements. On a year-on-year basis, margins declined due to inflation, though absolute gross profit increased.
Brand Building And Premium Push
During the quarter, PMFL strengthened brand visibility across its portfolio through television and digital campaigns. Gowardhan and Go brands expanded their reach through national shows such as Kaun Banega Crorepati and Super Dancer. The company also introduced a Rs 20, 20 ml sachet of Gowardhan Cow Ghee to improve affordability and drive trials across urban and rural markets.
Pride of Cows continued to position itself as a premium single-origin dairy brand through multi-platform campaigns, while Avvatar enhanced its brand appeal among young consumers through a marketing collaboration with actor Janhvi Kapoor, the company said in its exchange filing.
Management said commodity inflation is expected to persist, but maintained that the company remains focused on premiumisation, product innovation and distribution expansion to support long-term growth.
