Parag Milk Foods Limited
Q3 FY2025 Stock Research Report
Last Updated: January 30, 2025 | Sector: Dairy & FMCG
📊 Stock Overview
| Market Cap | ₹2,024 Cr |
| Current Price | ₹170 |
| 52-Week High/Low | ₹290 / ₹146 |
| Stock P/E | 19.8 |
| Book Value | ₹80.6 |
| Dividend Yield | 0.30% |
| ROCE | 10.9% |
| ROE | 10.5% |
| Debt | ₹648 Cr |
| Reserves | ₹843 Cr |
| Promoter Holding | 42.6% (+1.86% in 3 years) |
| No. of Shares | 11.9 Cr |
📈 Q3 FY2025 Financial Performance
Revenue
₹868.81 Cr (+10.5% YoY)
Net Profit
₹34.18 Cr
EBITDA Margin
7.12%
9M FY25 PAT
₹102 Cr
Growth Metrics
| Sales Growth (YoY) | 4.91% |
| Profit Growth (YoY) | -0.69% |
| 3-Year Sales Growth CAGR | 19.4% |
| 3-Year Profit Growth CAGR | 60.6% |
| Quarterly Sales Variation | 10.5% |
🚀 Future Growth Plans & Expansion Strategy
1. Product Innovation & Premiumization
- Focus on high-margin value-added dairy (cheese, whey protein, UHT milk)
- Expansion of premium segment under “Pride of Cows”
- Growth in B2B (HoReCa), retail, and institutional sales
2. Capital Expenditure & Infrastructure
- ₹150 Cr capex planned for FY2025-26
- Increasing cheese production capacity
- Automation & supply chain optimization
- Farm-to-table milk procurement investments
3. Geographical & Export Expansion
- Expansion in Tier-2 & Tier-3 cities
- Growth in Southeast Asia & Middle East exports
- Strengthening modern trade and D2C channels
4. Digital & Retail Strategy
- E-commerce partnerships (Amazon, BigBasket, Blinkit)
- Private label partnerships expansion
- Enhanced digital marketing initiatives
🏆 Competitive Landscape
| Company | Market Position | Focus Area |
|---|---|---|
| Amul | Market leader | Mass dairy products |
| Nestlé India | Strong R&D | Premium dairy |
| Britannia | Expanding dairy footprint | Cheese, flavored milk |
| Hatsun Agro | South India dominance | Dairy & ice cream |
| Heritage Foods | Regional player | Andhra Pradesh & Telangana |
📉 Key Risks & Challenges
- Milk Procurement Cost Volatility
- High Debt Burden (₹648 Cr)
- Regulatory Risks in dairy pricing
- Intense Competition from Amul & MNC players
- Price wars with competitors
📈 Valuation & Investment Thesis
Current P/E
19.8x
Price-to-Book
2.1x
1-Year Target
₹210-₹230
3-Year Target
₹300+
Investment Outlook
- Short-Term: Neutral (due to rising costs, competitive pressures)
- Long-Term: Positive (brand strength, premium dairy segment, export growth)
Potential Upside Triggers
- Expansion in cheese & whey protein markets
- Improved supply chain efficiency reducing costs
- Debt reduction enhancing profitability
Potential Downside Risks
- Raw material price fluctuations
- Increased competition from Amul, Nestlé, Britannia
- Regulatory interventions on dairy product pricing
🎯 Final Verdict
Current Stance: Hold for long-term investors, Buy on dips (<₹160)
Target Investors: Growth & FMCG investors looking for premium dairy exposure
High-Risk, High-Reward Play:
- ✅ If cost optimization & premiumization succeed, expect multi-year rerating
- ❌ If competition & debt burden persist, stock may remain range-bound
Leave a Reply
You must be logged in to post a comment.