Milkfood bets on premium dairy, plans Rs 20 crore Patiala investment

Milkfood Limited, an established player in India's dairy industry, is expanding its presence in the premium dairy segment with plans to introduce Ghee made from A2 milk, marking another step in the Company's strategy to build a stronger portfolio of value-added dairy products.

According to a statement, the planned launch comes against the backdrop of evolving consumer preferences in India's dairy market, where demand is increasingly moving beyond conventional staples towards differentiated products positioned around quality, provenance and traditional dairy practices. Through its A2 Ghee offering, Milkfood aims to address this emerging premium segment while strengthening product realisations and broadening its consumer-facing portfolio.

The initiative is part of the Company's wider business strategy for FY2026-27, which combines value-added product development with manufacturing capacity expansion, improved asset utilisation, energy-cost optimisation and financial discipline.


Milkfood's entry into the A2 Ghee category reflects the Company's focus on opportunities within the higher-value end of the dairy market. Ghee remains an important category within Indian households, with strong associations with traditional food practices and everyday consumption, the company said in a statement.

The proposed A2 Ghee will be positioned as a premium dairy offering, designed for consumers looking for differentiated and traditional dairy products. The product is expected to complement Milkfood's existing dairy portfolio and provide the Company with an opportunity to participate in a segment where product differentiation can support stronger realisation.

Rather than relying solely on volume-led growth, Milkfood's strategy increasingly focuses on combining its established dairy manufacturing capabilities with products that can potentially deliver greater value addition.

Rs 20 crore Patiala investment to support capacity expansion

The premium product strategy is supported by investments in manufacturing infrastructure at the Company's Patiala plant.

Milkfood is undertaking capital expenditure of approximately Rs 20 crore at the facility for establishing a dedicated Butter Plant and acquiring critical processing infrastructure, including a Continuous Butter Machine and Butter Cold Room.

The statement added that the investment is expected to strengthen the Company's butter manufacturing capabilities and provide additional support for its growing value-added dairy portfolio. Improved infrastructure is also expected to enhance manufacturing flexibility and capacity utilisation as Milkfood expands its product mix.

The Patiala investment forms part of a broader effort to strengthen the Company's operating base and create capacity for future growth.

Moradabad plant sale

Milkfood's current expansion strategy has also been supported by monetising assets and focusing on improving the Company's financial position.

During FY2025-26, the Company sold its Moradabad Plant at Agwanpur for approximately Rs 130 crore. The proceeds have been deployed towards loan repayment, strengthening working capital, and funding capital expenditure at the Patiala facility.

This approach allows Milkfood to redeploy capital towards areas aligned with its current growth strategy while simultaneously reducing financial leverage and supporting liquidity. The combination of debt repayment, targeted capital expenditure and investment in productive capacity is expected to provide a stronger foundation for the Company's next phase of growth.

Sustainability and other moves

Alongside product and capacity expansion, Milkfood is pursuing initiatives aimed at improving energy efficiency and reducing operating costs.

One key initiative involves transitioning the Company's boiler fuel from rice husk to parali, or paddy straw/agricultural waste. The move is expected to support better utilisation of agricultural residue while contributing to the Company's efforts to optimise energy costs. Milkfood is also installing a 500 kWp solar power plant for captive consumption.

Milkfood is also looking to expand its job work business, with revenue from the segment expected to reach approximately Rs 30 crore during FY2026-27.

For FY2026-27, Milkfood's said its strategy is centred on balancing growth with operational efficiency and financial discipline. The Company's focus on premium value-added products, targeted manufacturing investments, asset monetisation, energy efficiency and higher capacity utilisation is aimed at creating a more resilient and efficient business model.