India’s organised dairy sector is increasingly shifting beyond traditional liquid milk towards value-added products (VAP), including curd, yoghurt, cheese, paneer and ice cream. Moneycontrol Research examines whether this changing product mix can justify the premium valuations being assigned to some listed dairy players.
The report highlights that a higher VAP mix can improve realisations and profitability because value-added products generally involve greater processing, branding and product differentiation. However, the extent to which investors sustain a premium valuation depends on whether companies can convert this higher-value product mix into efficient capital utilisation and stronger returns.
The changing industry structure is visible among listed dairy companies. Milky Mist, Hatsun Agro Product and Dodla Dairy are all expanding their presence in value-added categories, although their growth, margins and operating performance differ.
Milky Mist has seen strong growth in categories such as yoghurt, ice cream, curd, cheese and paneer. Its Q1 FY27 revenue increased 43.56% year-on-year to ₹973.45 crore, while EBITDA rose 74.50% to ₹144.89 crore. The company has also increased its presence across e-commerce and other modern distribution channels.
Hatsun Agro Product has continued to expand its retail footprint, including through the HAP Daily network. However, higher milk procurement costs have put pressure on margins despite revenue growth. Dodla Dairy has similarly expanded value-added categories, particularly curd, while higher procurement costs have affected profitability.
The valuation gap between the companies is also notable. Recent market data cited in related reporting put Milky Mist at a P/E of 133.14, Hatsun Agro Product at 68.97 and Dodla Dairy at 25.24. Milky Mist's premium has been accompanied by higher reported growth and a 38.31% ROE, while Hatsun Agro and Dodla have comparatively lower valuation multiples.
The broader takeaway is that a higher VAP mix alone may not determine valuation. Growth, margins, return ratios, procurement economics, distribution expansion and, importantly, capital efficiency will influence how much premium the market sustains.
For India's dairy industry, the strategic shift remains significant: the opportunity is moving from simply selling more milk to generating greater value from every litre processed.
Source: Dairynews7x7 1 Oct, 2026 Read full story here
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