Dodla Dairy (DODLA) Q4 18/19 earnings summary

Executive summary

• FY19 consolidated total income rose 6.25% to INR 16,967.83 Mn; EBITDA grew 18.54% to INR 1,320.15 Mn and PAT increased 10.37% to INR 630.01 Mn.

• Growth initiatives included the KC Dairy acquisition, commissioning of the Rajahmundry plant, increased direct farmer procurement and expansion in Uganda and Kenya.

Financial highlights

• Consolidated revenue from operations increased 6.18% to INR 16,887.66 Mn from INR 15,904.75 Mn; total income was INR 16,967.83 Mn.

• EBITDA was INR 1,320.15 Mn, up 18.54% YoY; EBITDA margin expanded 82 bps to 7.82%.

• PAT increased 10.37% to INR 630.01 Mn; PAT margin improved 14 bps to 3.71%.

• Consolidated EPS rose to INR 11.32 from INR 10.26; basic EPS reflects the 16:1 bonus issue.

• Operating cash flow increased to INR 1,336.88 Mn from INR 860.96 Mn.

Outlook and guidance

• Strategy targets growth by converting more milk into higher-returning products, expanding plants and chilling centres, increasing direct procurement, and building overseas markets.

• Plans included adding 7–10 chilling centres annually, entering Andhra Pradesh’s coastal regions, and continuing curd and ice cream expansion.

• Uganda capacity was being expanded and two sales offices and depots were planned in Kenya to pursue market opportunities.

• Management expected demand from packaged dairy and value-added products to remain strong over the next five years.