Strong Milk Demand: Analysts Say Subscribe to Dodla Dairy

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Strong Milk Demand: Analysts Say Subscribe to Dodla Dairy
Credit: © Reuters.

By Aditya Raghunath -- Dodla Dairy launches its Rs 520 crore IPO today with an issue price of Rs 421-Rs 428 per share. Hyderabad-based Dodla is the third largest milk producer in the country and procures 10.3 million litres of milk a day.

Private equity firm TPG is one of Dodla’s investors and out of the Rs 520 crore, Rs 470 crore will be raised via an offer for sale from TPG and the company promoters.

For the first nine months of FY21, the company reported profit after tax of Rs 116 crore against an average of Rs 90 crore for the last three years.

“With rising health awareness post-pandemic, changing demographics and rising preferences for packed & branded milk products, the demand of milk & milk products are likely to continue to be strong. Additionally, the improved demand from hotels, restaurants and cafes post-pandemic would further aid the growth of the dairy sector,” said Choice Broking who which has recorded a subscribe rating to the IPO.

Angel Broking also has a subscribe rating to the IPO as do Reliance (NS: RELI ) Securities and Ventura Securities.  Angel Broking in a note said, “In terms of valuations, the post-issue 9MFY21 annualised PE works out to 16.4 times at the upper end of the issue price band, which is low compared to Parag Milk Foods which is trading at 32.7 times. Further, Going forward, we believe that Dodla Dairy would perform better on the back of an increase in value-added product mix. Thus, we recommend a subscribe rating on the issue.”

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  • Sakthi Ananth B @Sakthi Ananth B
    Rubbish ! There is nothing great about this company . This is one more company in IPO who want to create wealth with public money
    Like 3

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