Hatsun Agro Product, one of India’s major private dairy companies, expects its revenue to increase by as much as 50% over the next two financial years, driven by an expanding milk procurement network, investments in production capacity and geographical expansion beyond southern India. The company, known for its Arokya milk and Arun ice cream brands, is targeting stronger growth despite rising milk procurement costs and intense competition across the dairy industry.
Chairman RG Chandramogan told Reuters that Hatsun expects revenue to reach approximately ₹120 billion in the current financial year, compared with ₹100 billion in the previous year. For the following financial year, the company is targeting revenue between ₹140 billion and ₹150 billion, reflecting its ambitions to strengthen its market position and expand its dairy business.
The growth strategy highlights the increasing importance of reliable milk procurement, efficient distribution and investments in dairy infrastructure as companies compete to meet India’s growing demand for milk and value-added dairy products.
Milk Procurement and Geographical Expansion Drive Growth
Hatsun Agro reported revenue of ₹99.59 billion for the financial year ended March 2026, representing a 14.5% increase from the previous year. Building on this performance, the company is expanding its presence beyond its traditional southern Indian markets.
The company has already begun selling milk in Mumbai and Pune while increasing milk procurement operations in Odisha. These markets offer opportunities to expand its consumer base and establish stronger links with local dairy farmers.
For dairy processors, expanding procurement networks is essential to securing consistent raw milk supplies while supporting the production of milk, curd, ice cream and other dairy products. A broader collection network can also help companies reach more milk-producing communities and improve the efficiency of milk transportation and processing.
Hatsun currently operates a collection network of approximately 13,000 centres. Rather than focusing primarily on building new plants, the company plans to strengthen existing facilities and increase the volume of milk collected through its established infrastructure.
Its target is to raise daily milk procurement to 5 million litres next year, compared with approximately 4.3 million litres currently. Achieving this goal will require continued coordination with farmers, collection centres, transport operators and processing facilities.
₹10 Billion Investment to Strengthen Dairy Infrastructure
Hatsun plans to invest ₹10 billion during the current financial year and has already spent approximately ₹3 billion to ₹4 billion. Around one-third of the planned investment will be allocated to expanding milk procurement, while the remainder will be divided between manufacturing capacity, marketing and distribution.
| Business indicator | Reported figure |
|---|---|
| Revenue in FY2025–26 | ₹99.59 billion |
| Expected current-year revenue | ₹120 billion |
| Revenue target for the following year | ₹140–150 billion |
| Current daily milk procurement | Approximately 4.3 million litres |
| Target daily milk procurement | 5 million litres |
| Milk collection network | Approximately 13,000 centres |
| Planned investment for the current fiscal year | ₹10 billion |
The investment programme is intended to strengthen Hatsun’s ability to collect, process and distribute larger quantities of milk. Expanding existing facilities may also allow the company to increase operational capacity without relying exclusively on new manufacturing plants.
For the wider dairy industry, investments in collection infrastructure and processing capacity can improve supply-chain efficiency, although the benefits will depend on execution, local milk availability and demand.
Rising Milk Procurement Costs Challenge Profitability
Despite its ambitious growth targets, Hatsun faces cost pressures affecting dairy companies across India. According to Chandramogan, milk prices have increased by 20% to 22% over the past 15 months, driven by higher milk-fat and animal-feed costs.
Rising procurement prices can squeeze processors’ margins, particularly when competition limits their ability to pass higher costs on to consumers. Dairy businesses must therefore balance fair payments to milk suppliers with affordable consumer prices and sustainable operating margins.
Chandramogan expects milk supply to exceed demand within eight to ten months. If this forecast materialises, improved milk availability could ease procurement pressures. However, the effect on prices and profitability will depend on regional supply conditions, feed costs, seasonal demand and the pace of industry growth.
Resilient Demand Supports Dairy Market Expansion
Hatsun reports resilient demand across rural and urban markets despite inflation. Sales of seasonal products such as ice cream, alongside curd and other dairy staples, have supported business performance.
India’s dairy market offers opportunities for companies that can combine reliable milk sourcing with strong brands, efficient distribution and a diversified product portfolio. Expansion into western and eastern markets could help Hatsun reduce its dependence on southern India while increasing access to new consumers.
The company’s next phase of growth will depend on whether it can expand milk procurement, manage input costs and scale distribution while maintaining profitability.
For India’s dairy industry, Hatsun’s strategy underscores the importance of investing in farmer-linked procurement systems, modernising existing facilities and developing markets for both liquid milk and value-added products. Its performance over the next two financial years will provide an important indication of how effectively large dairy processors can navigate rising costs while pursuing nationwide expansion.
