### **Overview** Dodla Dairy Ltd is a leading **integrated dairy company** headquartered in Hyderabad, Telangana, with a fully vertically integrated "grass-to-glass" business model. Founded in 1995 (operations commenced in 1998), the company operates across the entire dairy value chain—from milk procurement and processing to distribution and branding. It has established a strong footprint in **South India**, is expanding into **Eastern and Western India**, and has successful international operations in **Uganda and Kenya**. Dodla also leverages **backward integration through Orgafeed**, its cattle feed and agri-input subsidiary, which strengthens its supply chain and supports farmer productivity. The company follows a **farmer-first philosophy**, ensuring fair pricing, veterinary support, and reliable markets for over **1.4 lakh dairy farmers**. --- ### **Strategic Growth Initiatives (Nov 2025)** #### **1. Acquisition of OSAM Dairy – Expansion into Eastern India** In November 2025, the acquisition of **HR Food Processing Private Limited (operating as 'Osam')** for ₹2,710 crore marked a major strategic milestone: - **Geographic expansion**: Strengthens Dodla's presence in **Bihar and Jharkhand**, entering high-potential eastern Indian markets. - **Distribution leverage**: OSAM brings an established network, enabling **rapid market penetration** and **brand consolidation** under the premium 'Osam' brand. - **Product portfolio synergy**: Adds complementary value-added products, supporting **VAP (Value-Added Product) premiumization**. - **Supply chain gains**: Acquires **processing plants, chilling centers, and collection infrastructure**, with OSAM operating at **1.8 lakh litres per day (LLPD)** and 10% regional market share. - **Procurement network**: Expands farmer base and milk sourcing capabilities in East India, creating **supply chain synergies**. **Post-acquisition outlook**: - OSAM currently operates at 2–3% EBITDA margin; Dodla aims to **bring margins in line with group levels (~12–13%) within 2–3 years** through operational improvements, higher VAP mix, and economies of scale. - Target to scale milk procurement from **1.2 to 2.0 lakh liters/day by FY27**. --- #### **2. Maharashtra Expansion – Diversifying Procurement & Sales** Dodla is executing a **large-scale greenfield project** in Solapur, Maharashtra: - **Investment**: ₹280 crore for a fully integrated facility with **10 lakh liters per day processing capacity**. - **Current procurement**: Already sourcing **2.4 lakh liters/day (H1 FY26)**, with milk initially sold in bulk. - **Strategic benefits**: - **Reduced dependency on South India**. - Access to **structurally lower milk procurement costs**. - Strengthens **B2B and bulk supply chain** in Western India. - Will eventually support **regional liquid and VAP distribution**. This marks a shift toward a **balanced growth strategy**: ~50% volume growth from **new geographies** and 50% from **deeper penetration in existing markets**. --- ### **Core Business Model & Operations** #### **Integrated "Grass-to-Glass" Model** - Direct procurement from **~140,000+ farmers** across **8,800+ villages** through **7,800+ Village-Level Collection Centers (VLCCs)**. - **16 advanced processing plants** across India (Andhra Pradesh, Telangana, Karnataka, Tamil Nadu), Uganda, and Kenya. - Daily processing capacity exceeds **24 lakh liters/day** (India: ~20 LLD pre-Maharashtra, expanding to 30 LLD). - End-to-end control ensures **traceability, quality, cost efficiency, and margin stability**. #### **Global Footprint** Dodla Dairy operates in **Africa** through three subsidiaries: 1. **Lakeside Dairy Ltd (Uganda)** 2. **Dodla Dairy Kenya Ltd** 3. **Country Delight Dairy Ltd (Kenya)** - **Brands**: 'Dairy Top', 'Dodla +', 'Pride of Cows'. - **Products**: Milk, yogurt, curd, paneer, cheese, ghee, UHT milk. - **Africa performance**: - **11.3% of total revenue in Q2 FY26**. - **Two processing plants**, 433 distributors. - Benefits from **limited competition**, **low input costs (grazing land, low milk prices)**, and **high per-capita growth in dairy demand**. - Holding via Singapore enables **tax optimization**: effective tax rate reduced from **30% to 15%** after repatriation. --- ### **Product Portfolio & Value-Added Products (VAP) Focus** #### **Key Products** - **Liquid Milk** (packaged, pasteurized, UHT) - **Value-Added Products (VAPs):** Curd, paneer, lassi, butter milk, flavored milk, ghee, ice cream, doodh peda, yogurt, milk-based sweets. #### **VAP Growth Drivers** - **High-margin focus**: VAPs like **probiotic curd, spiced buttermilk, ready-to-drink lassi, high-yield paneer**, and fortified milk. - In **OSAM segment alone**, VAP sales reached **₹14.8 crores (Nov 2025)**. - **Paneer demand** has doubled in South India; a key growth segment. - Expansion into **e-commerce, modern trade, and quick commerce**, with pilot launches in Tier-II cities. #### **Branding & Marketing** - Television campaigns (e.g., Pongal/Makar Sankranti) to strengthen **brand recall**. - Retail push via **839+ Dodla Retail Parlors (DRPs)** and presence in **1,000+ modern trade outlets**. --- ### **Orgafeed – Backward Integration & Agri-Synergy** Dodla’s subsidiary, **Orgafeed Private Limited**, is a critical part of its integrated strategy: - **Operations**: Kadapa and Kuppam, Andhra Pradesh. - **Capacity**: **480 MTPD (metric tons per day)** of cattle feed. - **Products**: Cattle feed, groundnut, sesame (gingerly), cottonseed, and oilseed crushing. - **Revenue & Profit (Q2 FY26)**: ₹414 million (revenue), ₹57 million (EBITDA). - **Farmer engagement**: - Feed sold directly to farmers via milk collection network. - Payments adjusted **against milk supply value** (credit offset). - Partnerships with veterinarians for livestock health services. - **Impact**: Boosts farmer milk yield by **15–20%**, strengthens loyalty, and reduces input cost volatility. Orgafeed has **significant headroom for growth**, currently serving ~30% of Dodla’s farmers with <50% capacity utilization. --- ### **Capacity & Distribution Network (Nov 2025)** | **Metric** | **Details** | |-----------|-----------| | **Processing Plants** | 16 (India: 14, Uganda: 1, Kenya: 1) – expanding to 17 with Maharashtra | | **Daily Processing Capacity** | 24+ lakh liters, targeted to reach **30 LLD** with Solapur plant | | **Chilling & Collection** | 190+ chilling centers, 7,800+ VLCCs | | **Distribution Reach** | 13 Indian states, 433 distributors in Africa | | **Sales Network** | 65+ sales offices, 2,900+ agents, 2,100+ distributors | | **Retail Presence** | **839 Dodla Retail Parlours (DRPs)**, modern trade, e-commerce | | **Employee & Dealer Network** | 839 DRPs, 104 modern trade partners, online delivery pilots | --- ### **Financial & Strategic Highlights (Nov 2025)** - **Dual-market strategy**: Strong integration between Indian and African operations, replicating the same low-cost, high-efficiency model. - **Capital discipline**: Funding expansion via **internal accruals and debt**, with benefits from **interest subvention, GST offsets, and utility savings**. - **Margin resilience**: Transitioned to **net seller of milk solids (SMP, butter)**, using in-house production to manage seasonality and boost margins. - **ROCE & ROE**: Historically strong (e.g., **ROCE: 19.1%, ROE: 15.8% in FY22**) with disciplined reinvestment. - **Revenue diversification**: - **India** (core, expanding east & west) - **Africa** (high-margin contributor: **11.3% of revenue in Q2 FY26**) - **Orgafeed & VAPs** – emerging high-growth verticals