Mumbai: Parag Milk Foods Limited is set to invest approximately ₹100 crore to significantly expand its paneer manufacturing capacity, increasing production capability from around 20 metric tonnes (MT) per day to 80 MT per day. The expansion is expected to strengthen the company’s presence in India’s organised value-added dairy market.
The company announced the planned investment on September 21, 2026, with the additional capacity expected to be commissioned by June 2027. The expansion will involve facilities at Manchar in Maharashtra and Palamaner in Andhra Pradesh.
The company said the investment is being undertaken as its existing paneer manufacturing facilities are operating close to full capacity. The expansion will add approximately 60 MT per day of production capacity through a combination of brownfield and greenfield initiatives.
The proposed investment is expected to be financed through a combination of internal accruals, borrowings or lease arrangements.
Focus on Value-Added Dairy
Parag Milk Foods’ decision to expand paneer production comes as the company continues to focus on value-added dairy products. According to the company’s disclosure, value-added products account for more than 90% of its overall turnover.
Paneer is one of the company’s key product categories and has reportedly recorded 28% growth over the past two years. The planned capacity increase is intended to support further growth as consumers increasingly shift towards branded and packaged dairy products.
The company also expects to benefit from the relatively low level of organisation in India’s paneer market. Organised players currently account for an estimated 5–6% of the overall market, according to the company’s cited market data.
Expanding Distribution Across India
With the additional manufacturing capacity, Parag Milk Foods plans to expand the availability of its regular and high-protein paneer products through its nationwide distribution network.
The products will be targeted across multiple channels, including General Trade, Modern Trade, Quick Commerce, E-commerce and HoReCa.
The company has also highlighted the shelf life of its branded paneer. Its products can have a shelf life of up to 75 days without preservatives, supported by its manufacturing and packaging technologies.
| Particular | Details |
|---|---|
| Existing paneer capacity | 20 MT/day |
| Additional capacity | Approximately 60 MT/day |
| Planned total capacity | Approximately 80 MT/day |
| Investment | Approximately ₹100 crore |
| Locations | Manchar, Maharashtra; Palamaner, Andhra Pradesh |
| Expected commissioning | June 2027 |
| Financing | Internal accruals, borrowings or lease arrangements |
| Key product | Paneer |
Growing Indian Paneer Market
The expansion comes against the backdrop of a growing Indian paneer market. According to an IMARC report cited in the company’s disclosure, the Indian paneer market was valued at approximately ₹73,140 crore in 2025.
The market is projected to reach around ₹2.15 lakh crore by 2034, representing a compound annual growth rate of approximately 12.34% between 2026 and 2034.
Rising interest in protein-rich foods and increasing consumer preference for branded and packaged dairy products are among the factors supporting market growth.
For Parag Milk Foods, the capacity expansion is closely aligned with its existing product strategy, given the contribution of value-added dairy products to overall turnover. Increasing paneer capacity could allow the company to respond to demand across both traditional retail and rapidly expanding digital distribution channels.
Rahul Kumar Srivastava, Chief Operating Officer of Parag Milk Foods, said the increased production capacity would enable the company to expand its pan-India distribution and strengthen its position in value-added dairy through innovation and broader consumer access.
The company has therefore positioned the ₹100 crore investment as a capacity-building initiative focused on one of its established value-added dairy categories. The success of the expansion will depend on the commissioning of the additional facilities and the company’s ability to utilise the new capacity across India’s increasingly organised packaged dairy market.
