India remains both the world’s largest producer and consumer of milk, contributing nearly 24% of global milk production. Rising urbanisation, a growing population, and shifting dietary preferences that prioritise dairy as a key source of nutrition have been central to this momentum.
According to Dodla Dairy’s annual report, the organised dairy sector is projected to grow at a compound annual growth rate (CAGR) of 6.9%, reaching USD 41.8 billion by 2030. This growth trajectory is further reinforced by government initiatives such as the National Dairy Development Programme, the Rashtriya Gokul Mission, and the extension of the Kisan Credit Card scheme to dairy farmers—all of which aim to enhance farmer empowerment and rural income stability.
Below, we examine three key players redefining the contours of India’s dairy industry.
1. Dodla Dairy: Expanding Horizons and Capturing Emerging Markets
Founded in 1995 in Andhra Pradesh, Dodla Dairy has evolved into an integrated dairy enterprise, operating across 13 Indian states and internationally in Kenya, Uganda, and Singapore. The company’s end-to-end value chain from procurement to processing and distribution offers superior traceability, cost efficiency, and quality control.
Expanding Capacity and Procurement Network
Dodla operates 16 advanced processing plants with a combined capacity exceeding 24 LLPD (Lakh Litres Per Day). Its procurement network spans 190 chilling centres and 7,800+ village-level collection centres, sourcing milk directly from 130,000 farmers across 8,800 villages.
Financial Snapshot: Margin Pressure Amid Growth
In Q1FY26, Dodla reported record revenue of ₹10 billion, up 10.5% year-on-year, driven by a 6.2% rise in milk procurement, 4.9% growth in sales volume, and a 12% jump in value-added product (VAP) sales. The VAP segment now accounts for 36.2% of total sales, up from 35.4% a year ago.
However, margins softened due to higher procurement costs (+9.5%), inventory liquidation, and unseasonal rains impacting yields. EBITDA fell 21.5%, reducing margins by 320 basis points to 8.2%, with PAT declining 3.3% to ₹629 million. Management anticipates margin recovery in Q2FY26, with full-year revenue growth projected at 10–15% and profit growth at 15–20%.
Strategic Expansion and Acquisitions
Dodla is investing ₹2.8 billion in a greenfield facility in Maharashtra, adding 10 LLPD capacity to strengthen its western presence. Its acquisition of HR Food Processing for ₹2.7 billion expands its reach into Bihar and Jharkhand, regions where HR commands a 10% market share.
The company’s ongoing focus on value-added products such as probiotic yoghurt, ready-to-drink buttermilk, spiced milk, and premium cheese reflects its commitment to premiumisation and margin enhancement.
Dodla Dairy Financial Performance
2. Heritage Foods: Strengthening Pan-India Reach and Value-Added Portfolio
Heritage Foods, headquartered in Andhra Pradesh, is pursuing its Vision 2030 to become India’s most admired dairy nutrition company. With operations across 17 states, Heritage serves over 10 million consumers daily through a robust network of 7,400+ distributors and 205,000 retail outlets.
Operational Strength
The company’s 18 processing plants provide a capacity of 28.3 LLPD, supported by direct procurement from 300,000 farmers across nine states. Its diversified product portfolio spanning milk, curd, paneer, ghee, milkshakes, and buttermilk comprises over 400 SKUs.
Financial Overview: Growth with Temporary Margin Compression
Revenue for Q1FY26 rose 10% YoY to ₹11.3 billion, sustaining double-digit growth for three consecutive quarters. Despite this, PAT declined 30.5% to ₹406 million, with margins narrowing to 6.5% due to weather-related disruptions.
The company remains committed to improving profitability through value-added products, led by curd, which contributes 70% of VAP revenue. In Q1FY26, VAP sales grew 7.4% to ₹4.5 billion, comprising 36.1% of total revenue. Heritage expects 15–16% overall growth in FY26, underpinned by operating leverage and its upcoming ice cream project in Shamirpet, expected to be operational by the end of FY26.
Heritage Financial Performance
3. Hatsun Agro: Scaling Leadership with Premium Dairy Play
As India’s largest listed dairy company, Hatsun Agro continues to dominate with its flagship brands Arokya, Hatsun, and Arun Ice Creams. Its vertically integrated model, spanning milk sourcing, cattle care, processing, and retail, ensures consistent quality and cost control. The company procures milk from over 500,000 farmers daily.
Performance and Expansion
Hatsun reported a 6.7% YoY revenue increase to ₹25.3 billion in Q1FY26, with EBITDA margins rising 100 bps to 15%. PAT climbed 13% to ₹1.5 billion, reflecting operational efficiency and pricing power.
While Tamil Nadu still accounts for 55% of revenue (down from 67% five years ago), the company is expanding across Andhra Pradesh, Telangana, Karnataka, and Maharashtra. Its acquisition of Milk Mantra Dairy for ₹2.3 billion introduces the Milky Moo brand, enhancing exposure to eastern markets and value-added categories.
Valuation Comparison (X)
| Company | P/E | 10-year Median |
| Dodla Dairy | 31.1 | 31.5 (3-year) |
| Hatsun Agro | 66.6 | 90.8 |
| Heritage Foods | 25.9 | 24.8 |
| Industry | 28.9 | NA |
While Hatsun Agro commands a premium due to its brand scale and leadership, much of its growth appears already priced in. In contrast, Dodla Dairy and Heritage Foods present balanced valuations, supported by expanding VAP portfolios and margin recovery potential. For investors, the near-term focus lies on execution efficiency and normalisation of profitability.
India’s dairy sector stands at the cusp of transformation, supported by structural tailwinds, policy backing, and evolving consumer preferences. Dodla Dairy’s cross-border expansion, Heritage’s pan-India network, and Hatsun Agro’s premiumisation strategy together showcase the industry’s dynamic evolution.
While cyclical margin pressures may persist, the long-term fundamentals of rural income growth, rising per capita consumption, and value-added diversification continue to underpin a compelling growth narrative for India’s dairy leaders.