Parag Milk Foods posts record FY25 revenue and 167% Q4 profit jump as dairy premiumisation drives growth

Parag Milk Foods Limited, a major player in India’s dairy-based FMCG sector, delivered its strongest financial performance to date in FY25, underscoring a successful shift toward premiumisation and brand-driven expansion. The company reported its highest-ever full-year revenue of ₹3,432 crore, growing 9% year-on-year, while the March 2025 quarter alone generated ₹918 crore in revenue, a 16% increase over the corresponding quarter of FY24. This robust top-line growth was driven by a 10% rise in annual sales volumes and a 13% surge in Q4 volumes, reflecting strong traction across core product categories such as ghee, cheese, and paneer.

The financial results arrive amid a broader shift within the Indian dairy sector, where value-added products are gaining popularity among urban and health-conscious consumers. With an evolving product portfolio and increased brand recognition, Parag Milk Foods is positioning itself to capitalise on changing consumer behaviour while strengthening its leadership in branded dairy segments.

What Drove Parag Milk Foods’ Surge in Q4 FY25 Profit?

The company’s bottom line demonstrated a significant uptrend in the final quarter of FY25. Profit before tax (PBT) reached ₹33 crore, growing 141% year-on-year, while profit after tax (PAT) jumped 167% to ₹26 crore. Consolidated EBITDA for Q4 FY25 rose to ₹75 crore, up 69% compared to the same period last year, with EBITDA margin improving to 8.2% from 5.6%. On a full-year basis, Parag Milk Foods reported an EBITDA of ₹293 crore, an increase of 30% year-on-year, while its EBITDA margin rose by 130 basis points to 8.5%. Net profit for FY25 stood at ₹119 crore, reflecting a 31% year-on-year growth.

This strong profitability was achieved despite headwinds from rising input costs, notably milk prices. The company’s strategic focus on improving product mix, enhancing operational efficiencies, and passing on input cost inflation to consumers through premium pricing has enabled consistent margin expansion. Net operating cash flows for the year stood at ₹212 crore, a clear indicator of the company’s ability to convert earnings into liquidity and support future investment needs.

How Did Parag Milk Foods Offset Milk Price Inflation?

The dairy sector experienced elevated procurement costs in FY25, with milk prices averaging ₹37 per litre during Q4 FY25, a 12% increase from the year-ago period. However, Parag Milk Foods managed to stabilise its annual milk procurement cost at ₹34 per litre, approximately flat year-on-year, showcasing its effective sourcing strategy. Handling over 15 lakh litres of milk per day, the company benefitted from its integrated backward supply chain model anchored by Bhagyalaxmi Dairy Farm, which houses more than 5,000 cows and a mechanised milking system.

Despite the inflationary backdrop, gross profit margins expanded to 25.8% in FY25, up from 24.5% in FY24. The ability to mitigate raw material cost volatility was supported by the company’s leadership in high-margin product categories and consistent implementation of cost pass-through mechanisms. The scale advantage, coupled with increased demand for value-added dairy products, allowed Parag Milk Foods to maintain profitability without compromising market share.

Which Brands Are Powering Parag Milk Foods’ Market Position?

The company’s flagship brands continue to perform well in their respective categories. According to the IMARC 2024 report, Gowardhan Ghee held a 22% share in the branded cow ghee segment, making it the market leader, while Go Cheese retained a 35% share in the cheese category, ranking second nationally. These figures affirm Parag Milk Foods’ dominant position in India’s value-added dairy space.

Other high-growth contributors include Avvatar, India’s first 100% vegetarian whey protein brand, which recorded 41% growth year-on-year. The premium dairy brand Pride of Cows also posted significant gains, aided by the launch of new offerings such as Greek Yogurt, Low-Fat Paneer, and Bocconcini mozzarella balls. The company’s brand portfolio is clearly aligned with consumer shifts toward premium, health-conscious dairy products, a trend that has accelerated in the post-pandemic landscape.

How Has Distribution and Marketing Evolved in FY25?

FY25 marked an aggressive expansion in the company’s distribution network, both in conventional retail and digital channels. Parag Milk Foods strategically partnered with quick commerce platforms and invested in last-mile logistics to ensure broad availability across urban and semi-urban markets. The distribution push was complemented by an impact-driven marketing approach, with brand visibility amplified through partnerships with high-profile television and entertainment properties such as Kaun Banega Crorepati, Bigg Boss, Maharashtrachi Hasya Jatra, and MTV Roadies.

New product launches during the year further deepened brand engagement. Gowardhan added new crunchy chikki variants, Go expanded its yogurt line, and Avvatar introduced chocolate and coffee protein bars. These innovations enhanced both horizontal and vertical product penetration across multiple demographic segments, building greater brand stickiness and long-term customer loyalty.

How Are Investors Reacting to Parag Milk Foods’ Growth Trajectory?

Investor sentiment around Parag Milk Foods strengthened materially in FY25. On April 3, 2025, the company raised ₹161 crore via a preferential issue of convertible warrants. The funding round attracted high-profile participation, including that of prominent investor Utpal Sheth and senior company executives such as CSO Ankit Jain. Proceeds from the issue are earmarked for debt optimisation, working capital enhancement, and future expansion initiatives.

This fundraising effort is being interpreted by market watchers as a structural inflection point, reflecting Parag’s transition from a promoter-led entity to a professionally governed company. The move also underscores institutional confidence in the company’s future growth prospects, especially in the highly competitive dairy FMCG landscape.

What Is the Stock Performance and Institutional Sentiment?

Parag Milk Foods’ stock closed at ₹182.02 on May 2, 2025, gaining 1.19% for the day. Over the past month, the stock has appreciated 7.84%, indicating positive sentiment following the strong Q4 and FY25 financials. However, on a trailing twelve-month basis, the stock is still down 13.78%, largely due to earlier concerns about input cost inflation and margin volatility.

From a valuation standpoint, the stock trades at a price-to-earnings ratio of 21.87, slightly above the sector average of 20.85. Its price-to-book ratio stands at 2.35, with a dividend yield of 0.27%. While these figures reflect modest premium valuations, they are supported by improving fundamentals and consistent profitability.

Institutional holding patterns affirm this recovery in confidence. As of March 2025, promoter holding remained stable at 42.61%. Foreign institutional investors increased their stake from 8.20% in December 2024 to 8.46%, while domestic institutional investors maintained their holding at 6.84%. The rising FII participation suggests growing interest from global funds in Indian mid-cap FMCG players with credible brand portfolios and efficient capital allocation strategies.

What Are Analysts Predicting for Parag Milk Foods?

Analysts remain bullish on Parag Milk Foods, with a consensus “Strong Buy” rating. The 12-month median price target is pegged at ₹260, representing an upside potential of over 42% from the current level. The favourable recommendation is rooted in sustained volume growth in high-margin categories, expanding distribution, strong brand equity, and a disciplined approach to capital deployment.

While certain brokerages have flagged raw milk price volatility and increased competition as potential risks, most agree that Parag’s premiumisation strategy and institutional backing provide a solid foundation for long-term value creation. The company’s shift toward digital commerce and innovative product development further strengthens its prospects in an increasingly health-aware consumer environment.

What’s Next for Parag Milk Foods?

The company’s long-term vision focuses on consolidating its leadership in the value-added dairy FMCG segment. Strategic priorities include deepening the product portfolio under Pride of Cows and Avvatar, strengthening the digital retail footprint, and exploring adjacent nutrition categories. Chairman Devendra Shah highlighted FY25 as a milestone year in Parag’s journey toward becoming a future-ready, professionally managed enterprise. The company’s continued focus on operational efficiency, governance excellence, and sustainable growth is expected to shape its strategic direction in FY26 and beyond.

With a robust financial base, renewed investor interest, and rising demand for premium dairy products, Parag Milk Foods is well positioned to capitalise on both domestic and international market opportunities. The company’s evolution reflects broader themes in the Indian FMCG space—where innovation, trust, and agility are becoming central to long-term success.