Dodla Dairy IPO: Mgmt says focused on value-added products; aims to hit pre-COVID capacity soon

Integrated milk products company Dodla Dairy's Rs 520 crore initial public offering (IPO) issue is now open for subscription from Wednesday. To understand the prospects of the company post the IPO issue and the outlook for the business going ahead, CNBC-TV18 spoke to the Managing Director of the company, Sunil Reddy Dodla.

On capacity utilisation, Dodla said, “Pre-COVID we were doing around 13 lakh litres and once COVID hit we have come to around 11 lakh litres. When COVID was relaxed in this April month we rapidly went back to 13 lakh litres. So our anticipation is once COVID fear goes down we will be able to touch 13 lakh litres immediately.”

On value-added products he said, “We grew from 15 percent to 27 percent over the last 4-5 years. This year’s drop is predominantly again because of COVID. Ice-creams and that kind of sales did move forward. But going forward we think it will go forward to 30-32 percent in a couple of years.”

The company expects that value-added products will expand its margins by another 1-2 percent.

“Going forward because the price increase that we have taken in anticipation of an increase in procurement price we will still be in the double-digit margins. We will hit the 10-11 percent of profitability,” Dodla elaborated.

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