Parag Milk Foods Reports Q2 Revenue of ₹1,241 Crore; Profit Surges 90% Sequentially

Key numbers

P/E TTM	24.2Sector 40.35
Market Cap	₹3,134.21 CrFMCG Sector
Promoter Holding	40.49%Latest Quarter
RSI	44.4Neutral Zone

Key highlights

• Consolidated revenue from operations increased to ₹1,241 crore, up from ₹945 crore in the preceding June quarter
• Net profit grew to ₹42.0 crore, representing a 90.0% surge on a quarter-on-quarter basis
• Board approved the Scheme of Amalgamation of Bhagyalaxmi Dairy Farms Private Limited with the company
• Operating margins improved sequentially to 4.4% from 3.1% in the first quarter of the fiscal year
• Adjusted profit for the period grew by 64.0% year-on-year, reflecting improved underlying operational efficiency
• Consolidated total assets as of September 30, 2026, stood at ₹2,539.60 crore

Sequential Earnings Recovery and Operational Performance

Parag Milk Foods demonstrated significant sequential momentum in the second quarter of FY27, with revenue from operations reaching ₹1,241 crore. This performance represents a recovery from the ₹945 crore reported in Q1 FY27. While net profit dipped 7.9% compared to the ₹45.6 crore reported in the same quarter last year, the adjusted profit growth of 64.0% YoY suggests improved operational resilience.

The company managed a total income of ₹1,243 crore for the quarter, while operating margins expanded to 4.4% from 3.1% in the prior quarter, supported by a diverse product portfolio across cheese, ghee, and fresh milk segments.

Strategic Amalgamation of Bhagyalaxmi Dairy Farms

The company's board has approved the merger of its wholly-owned subsidiary, Bhagyalaxmi Dairy Farms Private Limited, into Parag Milk Foods. Bhagyalaxmi Dairy, which manages the premium 'Pride of Cows' brand, reported total assets of ₹315.21 crore and a half-yearly turnover of ₹107.25 crore. The consolidation is intended to eliminate the multiplicity of legal entities and reduce regulatory compliance costs.

Since the transferor is a wholly-owned subsidiary, the entire share capital of Bhagyalaxmi will be cancelled, and no new shares will be issued as consideration, ensuring the parent company's shareholding pattern remains unchanged.

Cost Dynamics and Asset Base Expansion

• Cost of materials consumed for the quarter stood at ₹1,034.18 crore, reflecting the scale of dairy procurement
• Employee benefit expenses were recorded at ₹46.75 crore, showing stability compared to previous periods
• Finance costs rose to ₹26.58 crore for the quarter, compared to ₹21.90 crore in the preceding period
• Inventories significantly increased to ₹891.20 crore from ₹730.30 crore as of March 31, 2026
• Total non-current assets climbed to ₹1,013.87 crore, driven by investments in property, plant, and equipment

Rationale for Structural Simplification

The proposed amalgamation is intended to simplify the group structure and consolidate the business of the Transferor Company with its holding company.

Market Context and Long-term Growth Targets

The results come as Parag Milk Foods pursues an ambitious long-term revenue target of ₹10,000 crore over the next three to four years, as guided by management in October 2026. This vision is supported by a ₹105 crore brownfield expansion project announced in August 2026, which aims to double cheese manufacturing capacity from 60 MT/day to 120 MT/day. Despite the stock seeing a 19.91% decline over the past year, current valuations show a P/E of 24.2, which sits below the FMCG sector average of 40.35.

Institutional holding currently stands at 10.46%, with FIIs marginally increasing their stake to 7.59% in the current period.

What to watch next

• Formal sanction of the Bhagyalaxmi Dairy amalgamation by the National Company Law Tribunal (NCLT)
• Execution of the ₹105 crore brownfield expansion to double cheese manufacturing capacity to 120 MT/day
• Quarterly revenue progression toward the management's FY30 target of ₹10,000 crore

“The Scheme is in the interest of the Parties involved and their respective stakeholders.”

Parag Milk Foods · financial snapshot

Share price	₹249.52
Market capitalisation	₹3,134.21 Cr
Revenue (annual)	₹3,817.50 Cr
Net profit (annual)	₹135.05 Cr
Revenue (latest quarter)	₹944.57 Cr-0.08% vs previous quarter
Net profit (latest quarter)	₹22.05 Cr-31.61% vs previous quarter
P/E (TTM)	24.2×Sector 40.35×
Promoter holding	40.49%0.00% QoQ
FII holding	7.59%Current quarter

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.