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Parag Milk Foods Limited (PMFL), a leading manufacturer and marketer of dairy-based branded products i announced its unaudited financial result for the quarter and half year that ended September 30, 2023, reporting the total revenue for the quarter at ₹7,981.6 million registering a growth of 20.1 per cent y-o-y.
Despite the high festive base of last year, the core categories continued to post healthy volume and value growth driven by innovative branding and an expanded distribution base.
Stabilising procurement prices, along with improved product mix resulted in a 220 basis point expansion in the Gross Profit Margin (GPM); which percolated down to EBITDA margin expansion. The EBITDA margin for the quarter expanded by 160 basis points y-o-y and stood at 7.3 per cent. The overall business health remained strong; with PMFL posting a healthy cash flow from operations of ₹489.3 million for 1HFY24.
‘Better reach’
The innovative brand integration with Kaun Banega Crorepati (KBC) has enabled PMFL to gain strong consumer connections and expand distribution reach. The company further strengthened the ties, by collaborating for the second time with KBC and is likely to result in better reach in tier 2 and tier 3 towns and cities. As a strategic focus area, PMFL continues to invest in expanding its distribution reach and outlet overage.
Devendra Shah, Chairman said, “I am delighted to share a healthy revenue growth of 20.1 per cent y-o-y to ₹7,981.6 million led by volume growth and our product premiumization drive. This growth is supported by healthy business profitability; wherein our Gross and EBITDA margins have expanded by 220 and 160 basis points respectively. It gives me pleasure to share that for the 1HFY24, the business has posted strong Cash Flow from Operations of ₹489.3million”.
He added, “ Further, on the back of a softening input cost environment and with good festive demand we expect the growth momentum to accelerate. Given this backdrop, we are confident to show healthy growth in our profitability in the coming quarters as well”
Shah said the company has also embarked on a business transformation drive by partnering with Boston Consultancy Group (BCG) to aid us in unlocking new avenues for growth and streamlining our operations for long-term sustainability.
Core categories of ghee and cheese have seen continuous traction throughout the quarter and have posted a growth of 6.2 per cent y-o-y.
The Direct to Consumer (D2C) brand Avvatar continued its momentum and recorded a robust 62.7 per cent growth y-o-y, led by 57 per cent volume growth y-o-y. The overall protein portfolio has continued to record market share gains.
In line with the company’s premiumisation agenda- the brand Pride of Cows continues to witness healthy traction. The brand is expanding its product portfolio as well as distribution footprint.
For the quarter, the average milk procurement stood at 15 lac litres per day; aided by a stable global market coupled with a good flush season; the milk prices have stabilized. For the quarter the average milk price stood at ₹35.6 per litre.
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