Reddy attributed the slight dip in earnings before interest, tax, depreciation, and amortisation (EBITDA) margins to 10.6% in the December quarter, to temporary factors such as lower initial margins from the new Kenya plant and inventory sales that boosted revenue but not profitability.
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Margins are expected to stabilise going forward and the company intends to pass on any further cost benefits to customers to support demand.Dodla Dairy is expanding milk procurement capacity, currently at 17 lakh liters per day, with a target of 20 lakh liters per day by the end of this year. It is also investing ₹280 crore in a new plant in Maharashtra, which will have a capacity of 10 lakh liters per day and is expected to be operational in 18-20 months. Existing procurement capacity of 2.3 lakh liters per day is also being increased to 4 lakh liters per day.
The company is focusing on deepening its presence in existing markets rather than expanding into new geographies in the coming year.
Its cattle feed business, currently at 30% capacity utilisation, is expected to reach 50% utilisation, contributing to growth.
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Dodla Dairy is also becoming a market leader in Uganda and expects further expansion in Kenya, targeting an additional 50,000-60,000 liters of growth in Africa.
