Dodla Dairy is furthering its focus on value-added products, capacity expansion and international growth as it charts its next phase of expansion, according to Chairman Dodla Sesha Reddy’s message to shareholders in the company’s Annual Report 2025-26.
The dairy company is aiming to increase the contribution of value-added products to 32-34% of revenue over the medium term, supported by category expansion, stronger distribution and continued brand investments.
Value-added products remain key growth driver
During FY26, value-added products contributed 29.2% of Dodla Dairy’s revenue, compared with 33.8% in the previous year.
The decline was primarily due to the company’s strategic decision to exit low-margin bulk skimmed milk powder (SMP) and butter sales, redirecting milk supplies towards higher-margin branded categories.
Reddy said evolving consumer preferences are driving demand for packaged and quality-assured dairy products, with categories such as curd, paneer, ghee and fermented products gaining increasing traction.
East Africa emerges as a strategic growth market
The company highlighted East Africa as a significant long-term opportunity for growth. Dodla’s operations in Uganda and Kenya delivered their highest-ever annual contribution during FY26, accounting for nearly 12% of consolidated revenue.
The company expects the contribution from its African operations to increase to 15-18% by FY29.
According to the chairman, Africa’s dairy industry remains underpenetrated despite substantial livestock resources. Milk production across the continent increased from 45.5 million tonnes in 2013 to 53.2 million tonnes in 2023, yet Africa accounts for only about 5% of global milk production while housing nearly one-fifth of the world’s cattle population.
Strong balance sheet supports expansion
Dodla Dairy invested ₹430 crore during FY26, funded entirely through internal accruals and operating cash flows.
Despite the investment cycle, the company ended the year with a virtually net-debt-free balance sheet and cash and liquid investments of ₹659.4 crore.
The Board has recommended a final dividend of ₹5 per share for FY26.
The company said it would continue to evaluate selective acquisitions that offer clear synergies in procurement, distribution or product portfolios.
Capacity expansion gathers pace
A major growth project is Dodla’s integrated greenfield dairy plant near Solapur in Maharashtra. The facility, being developed at an investment of ₹280 crore, will have an installed capacity of 10 lakh litres per day and is expected to be commissioned by the end of FY27.
The plant is expected to strengthen the company’s presence in Western India by leveraging favourable milk procurement economics and access to adjacent markets.
Meanwhile, the company’s OSAM platform is providing a foundation for expansion in Bihar and Jharkhand. Operational improvements and product rationalisation efforts are underway, while a proposed seven-acre land allotment by BIADA could provide additional scope for scaling operations.
Uganda expansion planned
Dodla is also advancing its Phase-2 greenfield expansion project in Uganda. The company has secured a 70-acre land parcel near Kampala to deepen its integrated model covering milk procurement, processing and branded distribution in East Africa.
Reddy believes the expansion will help strengthen the company’s presence in one of its fastest-growing international markets.
Focus on profitable and sustainable growth
Looking ahead to FY27, Dodla Dairy expects the industry environment to become more favourable as milk supply improves and input costs gradually normalise.
The company said its long-term growth strategy will continue to focus on direct milk procurement, expansion of chilling and processing infrastructure, a richer value-added product mix, disciplined geographic expansion and strong quality systems.
Reddy said the next phase of growth would be driven by capacity addition, integrated scale and margin expansion, supported by prudent capital allocation and a strong balance sheet.