Organised dairy sector may clock 13-15% revenue growth this fiscal: Crisil

Kolkata: India's organised dairy sector could record a revenue growth of 13-15% this fiscal, the fastest in recent years, as sustained demand for milk and value-added products offsets higher prices triggered by rising raw milk procurement costs, according to a Crisil Ratings report.

However, it said profitability is likely to remain largely unchanged as companies pass on higher input costs to consumers in phases.

The report is based on an analysis of 37 dairy companies, which collectively account for nearly 60% of the organised sector's revenue.


Revenue growth is expected to accelerate by 200-400 basis points over the estimated 11% growth recorded last fiscal, driven by a volume growth of 8-10% and staggered price hikes. Demand is expected to remain resilient because milk and traditional dairy products such as butter and ghee are essential household staples, while consumption of value-added products continues to gather pace.

According to Crisil Ratings, adverse weather conditions linked to El Nino, including an intense summer and below-normal monsoon, along with rising fodder costs, are expected to slow raw milk production growth to around 4% this fiscal from a compound annual growth rate (CAGR) of about 5% between FY20 and FY25.