Dairy FMCG firm Parag Milk Foods Limited (PMFL) reported a notable improvement in its financial performance on Friday. The company disclosed a substantial year-on-year (YoY) increase of 120.9%, with its consolidated net profit reaching INR 25.19 crore for the second quarter (Q2) ending September 2023. This signifies a noteworthy rise from the INR 11.39 crore consolidated net profit reported in the corresponding quarter of the previous fiscal year, as outlined in its recent regulatory filing.
In the same period a year earlier, the company’s total income increased to INR 803.7 crore in Q2 FY24, up from INR 665.16 crore.
According to the BSE filing, total expenses for the company expanded to INR 779.34 crore in Q2 FY24, compared to INR 654.83 crore in the corresponding period of the previous fiscal year.
The company noted a robust beginning to the festive season, marked by strong demand across various segments.
Despite the elevated festive performance of the previous year, the fundamental categories consistently recorded robust growth in both volume and value. This growth was attributed to inventive branding strategies and an extended distribution network. The stabilization of procurement prices, coupled with an enhanced product mix, contributed to a 220 basis point expansion in the Gross Profit Margin (GPM). This expansion also translated into an increased EBITDA margin, as shared by the company.
The EBITDA margin for the quarter saw a year-on-year expansion of 160 basis points, reaching 7.3%. The overall business health remained robust, as Parag Milk Foods Limited (PMFL) reported a healthy cash flow from operations amounting to INR 48.93 crore.
PMFL’s creative integration with Kaun Banega Crorepati (KBC) has facilitated a robust connection with consumers and an extension of distribution reach. According to a company statement, this integration is anticipated to enhance outreach particularly in tier 2 and tier 3 towns and cities.
Expanding its distribution reach and coverage of outlets will remain a strategic focus area for PMFL, with ongoing investments in this direction.
Devendra Shah, chairman of the company said, “On the back of a softening input cost environment and with good festive demand we expect the growth momentum to accelerate. Given this backdrop, we are confident to show healthy growth in our profitability in the coming quarters as well. We have also embarked on a business transformation drive by partnering with Boston Consultancy Group (BCG) to aid us unlock new avenues for growth, and streamline our operations for long-term sustainability.”
Parag Milk Foods additionally conveyed that key categories, such as Ghee and Cheese, sustained consistent momentum throughout the quarter, achieving a year-on-year growth of 6.2 percent.
