Dairy industry may witness 12-14% surge in revenue in FY23, says report

4 Nov 2022 , 11:30 AM

According to a report by ICRA, the dairy industry is anticipated to experience 12—14% revenue growth this fiscal year thanks to the robust recovery of the hotels, restaurants, and catering (HoReCa) sector and the rise in retail prices.

According to a report released by Icra on Thursday, Indian dairy companies are expected to have revenue growth of 12—14% in FY23 on a year-over-year basis, supported by a significant recovery in demand, particularly in the HoReCa segment and an increase in retail prices.

However, it noted, the operating profit margins are anticipated to narrow by 120-160 bps year over year as the retail price increases are anticipated to only partially offset the pressures from rising input costs.

Icra anticipates that the sector will keep its credit profile stable, helped by a positive demand outlook and modest debt levels.

Lumpy Skin Disease (LSD) was widespread in the first half (H1) of FY23, especially among cows in the northern states, which negatively impacted milk production yields.

ICRA anticipates a little slowing in milk production increase to 4-5% in the current fiscal year, despite the fact that an effective immunization program helped restrict the disease.

According to the research, value-added product sales (VADPs) saw a solid year-over-year growth of 18—20% in FY22.

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