Milky Mist sees limited impact from inflation, El Niño as revenue grows 42%

Inflation, El Niño and global uncertainty had little impact on Milky Mist Ltd in the September quarter, with the company helped by its focus on value-added products and calibrated price increases, K. Rathnam, the company's chief executive officer, said. Good rains in Tamil Nadu and parts of Karnataka should also boost milk purchases.

“As far as we are concerned, we don’t see much impact on all three parameters (agricultural inflation, El Niño, and geopolitical uncertainties). Even with these three parameters prevailing, we can grow because we are not in pouch milk. We are only in value-added products,” said Rathnam, in a post-earnings interview with Mint.

The company's September-quarter revenue from operations rose 41.6% year-on-year to ₹1,089.4 crore, beating the Bloomberg estimate of ₹1,015 crore. Net profit surged 174.5% to ₹77.94 crore from ₹28.39 crore a year earlier, also ahead of the estimate of ₹58.1 crore.

To sustain its growth momentum, the company is expanding its portfolio of protein-rich products and convenience foods while increasing its presence beyond South India. Rapid growth in quick-commerce channels is also emerging as an important driver of sales. High-protein paneer, Greek yoghurt and Skyr are among the products attracting demand on these platforms. Its protein range currently contributes around 12-14% of revenue, a share the company expects to increase to 20%, Rathnam said.

• Revenue rose 41.6% to ₹1,089.4 crore, beating estimates, while profit grew 174.5%.
• Skipping pouch milk, firm says inflation and El Niño barely hurt it.
• Operating profit margin widened to 15.17% as higher volumes offset higher milk costs.
• Protein products currently bring in 12-14% of revenue; the goal is 20%.
• South accounts for 70% of sales; a Baramati plant by FY30 will aid expansion.

“The protein range contributes around 12-14% to our top line, and that has been growing. Going forward, we expect around 20% of our top line to come from this category,” he said.

Milky Mist has been growing at around 40-42% over the past two quarters, against its initial annual growth guidance of 33%. Yoghurt grew around 160% in the September quarter, while ice cream grew 53%. Paneer recorded around 40% growth in both volume and value, Rathnam said. Milk procurement volumes rose 30%, supporting the expansion.

Milk prices across the country increased by around 8-11%, prompting the company to take calibrated price increases of 8-9% in select categories rather than across its portfolio. Higher volumes and capacity utilisation helped it maintain and improve margins, he said.

Consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) rose 53.9% to ₹165.21 crore, while the Ebitda margin expanded to 15.17% from 13.95% a year earlier.

Milky Mist has invested ₹40 crore in technology for Greek yoghurt production and plans to restore Skyr's protein content to 12 grams, Rathnam said. The company had earlier reduced Skyr's protein content by one percentage point due to technological constraints that necessitated longer operating hours and lower capacity utilisation. Greek yoghurt's protein content remains at 8%, he said.

The company has expanded its protein portfolio with high-protein lactose-free milk, following the launch of high-protein paneer cubes in the previous quarter. It also plans to use whey generated by its growing cheese business to manufacture whey protein. It has no immediate plans to enter the protein powder or yeast-based protein markets, preferring to focus on milk-based products and ready-to-drink and ready-to-eat protein offerings.

“We will stick to milk-based, native proteins,” Rathnam said, citing limited global literature on the nutritional quality of yeast protein.

Competition in value-added dairy is increasing, with more companies entering the segment, including Reliance and Varun Beverages. Opportunities are emerging in products such as high-protein milk, buttermilk, milkshakes and coffee milk. Milky Mist sees opportunities in products such as high-protein milk, buttermilk, milkshakes and coffee milk, he said.

Milky Mist competes with established dairy players such as Amul, Mother Dairy, Nandini, Heritage Foods, Parag Milk Foods, Hatsun Agro Product and Dodla Dairy in the broader value-added segment.

Beyond dairy, the company is expanding its convenience-food portfolio through Asal Foods, which sells batter, chapatis and parathas. It has shifted manufacturing from Bengaluru to its Perundurai headquarters and recently launched high-protein atta under the Asal brand, containing 25% protein.

“The category is growing, although it is not yet a material contribution to Milky Mist. We see a larger opportunity because consumers want convenience,” Rathnam said.

Southern India accounts for around 70% of Milky Mist's sales, with the remaining 30% coming from other regions. The company expects the mix to shift towards 60:40 over time and has acquired land in Baramati, Maharashtra, for a plant that is expected to become operational by FY30, Rathnam said.

Also Read | Rising dairy costs leave sweet makers in a bind

The company is also strengthening general trade in smaller towns, including parts of Uttar Pradesh, Bihar and the Northeast. It aims to keep 35-40% of sales from general trade, with the rest coming from other channels.

Milky Mist expects festive and winter demand to support cheese, paneer, butter and ghee in the second half of the financial year, with ghee typically benefiting from increased sweet production during the festive season.

Vaeshnavi Kasthuril

Vaeshnavi reports on the business of consumption from Bengaluru, tracking how India shops, eats, and clicks. As a correspondent with Mint’s consumer economy team, she covers sectors ranging from retail and food and beverage to the rapid rise of quick commerce. She is a 2025 graduate of the Asian College of Journalism’s Bloomberg Business and Finance programme. She joined the Mint newsroom in May 2025 and this is her first stint in journalism. She holds a bachelor's degree in accounting and finance from the University of Madras. Vaeshnavi loves storytelling and breaking down complex jargon and numbers to bring out insightful yet simple-to-understand narratives. She is a Malayali but has spent most of her life living in Chennai. During her school days, she was an avid debater and loved participating in anything that involved holding a mic and standing on stage talking to a room filled with people. A diehard SRK fan, she can be found vibing to Indie music and Bollywood songs in her free time. She is a self-confessed cold coffee addict who won’t let a day pass without one, and is always café-hopping in search of the city’s best brew.

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