Parag Milk Foods Approves ₹205 Crore Expansion to Quadruple Paneer and Double Cheese Capacity

Parag Milk Foods Limited has approved an investment of approximately ₹205 crore to expand its paneer and cheese manufacturing capabilities, reinforcing its focus on value-added and protein-led dairy products.

The expansion comprises approximately ₹100 crore for paneer manufacturing and ₹105 crore for cheese production. Once completed, the projects will increase the company’s paneer capacity from 20 MT/day to 80 MT/day and cheese capacity from 60 MT/day to 120 MT/day.

The approvals were announced following the company's Board meeting on November 3, 2026. The investments form part of its strategy to strengthen its flagship dairy categories and respond to rising demand for branded, packaged and protein-rich products.

Paneer Capacity to Increase Fourfold

The company plans to increase its paneer manufacturing capacity by 60 MT/day, taking total capacity from 20 MT/day to approximately 80 MT/day.

The approximately ₹100 crore investment covers expansion at Manchar in Maharashtra and Palamaner in Andhra Pradesh. The facilities are expected to manufacture both regular and high-protein paneer, with commissioning targeted by June 2027.

The expansion follows strong performance in the paneer category, which recorded its highest-ever quarterly volumes in Q2 FY27, according to the company.

Parag is looking to leverage its manufacturing capabilities and distribution network to increase the availability of branded paneer across general trade, modern retail, e-commerce, quick commerce and the hotel, restaurant and catering (HoReCa) segment.

Cheese Manufacturing Capacity to Double

Alongside paneer, Parag is investing approximately ₹105 crore to add 60 MT/day of cheese manufacturing capacity.

The project will increase total cheese capacity from 60 MT/day to approximately 120 MT/day. The company has targeted completion during FY28.

The cheese expansion is expected to support growing demand across retail and institutional channels while strengthening the company's presence in the value-added dairy segment.

Together, the paneer and cheese projects will add approximately 120 MT/day of manufacturing capacity across the two categories.

₹205 Crore Investment: Capacity Expansion at a Glance

The figures represent planned capacity after the respective projects are completed, not current production output.

Q2 FY27 Performance Supports Expansion Strategy

The capacity expansion comes after a strong second quarter for Parag Milk Foods.

The company reported consolidated revenue of ₹1,241 crore in Q2 FY27, representing 23% year-on-year growth, supported by 12% volume growth.

Its flagship categories—ghee, cheese, paneer and curd—generated ₹778 crore, accounting for approximately 63% of quarterly revenue. These categories recorded 20% value growth and 7% volume growth.

The company's EBITDA stood at ₹101 crore, with an 8.1% margin. Parag reported that EBITDA increased 37% after adjusting for a one-off item in the previous year's comparable period.

Its New Age Business, comprising Pride of Cows and Avvatar, generated ₹154 crore in quarterly revenue, up 71% year-on-year.

These results underline the growing contribution of value-added dairy and nutrition-led products to the company's business.

Branded Paneer and Protein-Led Dairy Create New Opportunities

Parag's investment reflects a wider shift in India's dairy market towards branded and standardised products.

Paneer remains a major category in Indian dairy consumption, with demand increasingly influenced by quality consistency, packaging, convenience and protein content.

The company has also highlighted the opportunity to expand its high-protein paneer portfolio alongside conventional products. This positions the investment within the broader consumer shift towards protein-rich foods and differentiated dairy offerings.

For the industry, increased organised manufacturing capacity could support wider distribution, more consistent product quality and stronger competition in the packaged paneer market.

What the Expansion Means for India's Dairy Industry

The ₹205 crore investment signals growing confidence in the long-term potential of India's value-added dairy segment.

For paneer manufacturers, the planned fourfold capacity increase highlights the importance of scale, packaging technology and distribution reach. For cheese producers, the expansion reflects the opportunity to serve a broader consumer base and institutional demand.

However, additional capacity alone does not guarantee higher profitability. The commercial performance of these projects will depend on capacity utilisation, milk procurement costs, consumer demand, product pricing and distribution efficiency.

Parag Milk Foods is making a clear strategic bet: the next phase of dairy growth will be driven not only by milk volumes, but also by higher-value products that combine convenience, quality and nutrition.

Source: Read full story here 06 Nov, 2026 Edited and Reported by

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