Dodla Dairy: Dodla Dairy IPO Date, Listing Price & More (Detailed Analysis)

Dodla Dairy: Dodla Dairy IPO Date, Listing Price & More (Detailed Analysis)

Last updated: 16 Jun, 2021 | 04:52 am

Dodla Dairy: Dodla Dairy IPO Date, Listing Price & More (Detailed Analysis)

Dodla Dairy IPO  is set to raise up to Rs 520 crore via IPO which opened on 16th June, Wednesday. Here are the details:

About Dodla Dairy

  • Dodla Dairy was established in 1995. The company has been in business for more than two decades.
  • It is an integrated dairy company that operates mainly in south India in states like Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, and Maharashtra. It has a presence in overseas markets and serves countries like Kenya and Uganda.
  • The main source of revenue for the company is from the sale of milk and dairy-based value-added products (known as VAPs) in the branded consumer market.
  • The firm has a strong distribution network of 40 sales offices, 863 milk distributors, 3336 distribution agents, and 449 product distributors across 11 states in India.
  • As of March 31, 2021, Dodla Dairy is the 3rd highest in terms of milk procurement per day with an average procurement of 1.03 million liters of raw milk per day. It is 2nd highest in terms of market presence across all of India amongst private dairy players.

Peer Analysis

  • Dodla Dairy is the nation’s third-largest dairy company by daily milk procurement, after bigger players such as Hatsun Agro Products and Heritage Foods. 
  • Dodla Dairy had reported Return on Net Worth of 11.5%, higher than Parag Milk Foods and Heritage Foods in FY20. However, the company has reported excellent earnings in the Apr- Dec 20 period, which may not be sustainable over the long term.


  • The Revenue from Operations of the company increased at a CAGR of 15.98% over FY18 to FY20 and amounted to Rs 2,139.37 crore in Fiscal 2020. 
  • PAT fell 6% annually from FY18- 20. Value products that made up for 27.18% of total revenues in FY20 commanded 24.68% of the revenue pie in the first nine months.
  • Dodla Dairy has shown exceptional performance in the Apr-Dec 20 period, with a huge increase in profit (due to higher realizations and decline in expenses). The company reported total revenues of Rs 1,414 cr and Net Profit of Rs 116 cr in Apr-Dec 20 period. 
  • EBITDA also saw an increase during this period at a CAGR of 12% and amounted to Rs 140.93 crore in FY20. EBITDA margin for the Apr-Dec 20 period rose to 14.6% from 6.6% in FY20 on the back of heavy cost-cutting measures. The management too has guided towards normalization of margins.
  • Return on Equity and Return on Capital Employed for Fiscal 2020 were at 11.50% and 17.01% respectively.
  • The consolidated net realisation for Apr-Dec 20 was Rs 48.79/litre compared to Rs 44.98/litre in the same period previous year. The cost of goods sold for 9MFY21 was Rs 31.26/litre compared to Rs 32.98/litre.
  • While the company has not paid any dividend for FY18 and FY 19, it has paid a dividend of 52% for FY20. It has not declared any dividend so far for FY21. Dodla Dairy has said that it will follow the prudent dividend policy based on its financial performance and future prospects.

About the issue

  • Issue open: 16th June- 18th June 2021
  • Price band: Rs 421 - 428 per share
  • Issue Size: Rs 520 crore (Fresh Issue of Equity Shares aggregating up to Rs 50 Crore)
  • Reservation: QIB 50%, Retail - 35%, NII 15%. 
  • Bid lot: 35 shares, and in multiples of 35 shares

INDmoney recommendation

Dodla Dairy has shown an exceptional improvement in its margins and bottom-line growth in the Apr-Dec 20 period, on the back of heavy cost-cutting measures and improvement in its sales mix (of value-added products). Going forward, it remains to be seen if Dodla is able to sustain such a strong financial performance. 

The vast improvement in performance reflects in the company’s valuation too. At the higher end of the price band, Dodla Dairy is priced at 51 times FY20 earnings, while just 16.4 times Apr-Dec 20 EPS (annualized). In comparison, the Hatsun Agro quotes at a PE of 180.4 times and 82.2 times of its FY20/FY21 EPS. Heritage Foods quotes at 13.4 times of its FY21 EPS. The valuations are at par with Heritage Food while at a steep discount to Hatsun Agro. Given its positioning in the industry, the asking price seems to be reasonable. 

Given factors such as market leadership, strong growth outlook, improved efficiencies due to better value-added mix, healthy margins, debt-free status, and robust return ratios, we remain positive on the prospects of the issue from a long-term perspective.