Modern Dairies Ltd Management Discussions

INDUSTRY STRUCTURE & DEVELOPMENTS

Indias organised Dairy Industry is witnessing its next phase of growth in Tier-2 and Tier-3 cities, where consumption patterns are increasingly showing same growth as in metro markets. It is noted that orders frequencies and spending levels in several categories are now matching, and in some cases exceeding metro benchmarks, driven by rising incomes, rapid urbaniaton and growing consumer preference for branded, quality-assured dairy products. Categories such as cheese, yogurt and dairy beverages are becoming regular components of consumers dairy baskets.

With rising consumer aspirations, improving infrastructure, increasing employment opportunities and growing awareness around nutrition and wellness, smaller cities are rapidly emerging as the next battleground for organised dairy companies seeking long-term growth.

For dairy companies, success will increasingly depend on their ability to build deep distribution networks, strengthen cold chains and offer innovative value-added products tailored to evolving consumer preferences.

OPPORTUNITIES AND THREATS OPPORTUNITIES

• Growing demand for protein, vitamins, and minerals is driving consumers toward functional, nutrition- rich foods ? an essential component of the Rising preference for preservative-free, traceable, and transparently sourced dairy products.

• Strong market pull for cultured and health-oriented offerings, such as dahi, lassi, flavoured yogurt, fortified milk, and probiotic drinks.

• Population growth and rising household disposable incomes are increasing purchasing power for daily nutritional needs.

• Surging overall consumption continues to expand the total addressable market for dairy across India.

THREATS

• The crowded landscape with fierce competition for market share among established legacy players and aggressive new entrants.

• Companies face constant pressure to differentiate products, innovate, and capture shifting consumer loyalties.

• Indian milk product exports face direct pricing and quality competition from established global suppliers.

RISK AND CONCERN

The dairy sector is entering a challenging phase. Climate variability, increasing heat stress, fodder constraints and uncertain rainfall patterns are becoming important factors affecting animal productivity. In such an environment, milk production growth will depend on farmer confidence to invest in animals, feed, genetics and technology.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

To provide reasonable assurance that assets are safeguarded against loss or damage and that accounting records are reliable for preparing financial statements, management maintains a system of accounting and controls including an internal audit process. Internal controls are supported by management reviews.

The Board of Directors have an Audit Committee that is chaired by an Independent Director. The Committee meets periodically with Management, Internal Auditor, Statutory Auditors to review the Companys program of internal controls, audit plans and results, recommendations of the auditors and managements responses to those recommendations.

FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS

Your company during this Financial Year under review has achieved a revenue of Rs. 3,41,22 Lacs as against Rs. 3,48,92 Lacs over the previous year. The operating profit this year was Rs. 11,11 Lacs as against Rs. 14,77 Lacs in the previous year.

The Focus of the company continues to be in the fresh dairy, cultured products, cheese and milk nutritional ingredient business. It is a growing market segment. The companys operating team is working relentlessly to achieve better performance.

This year the prices of milk continued to remain on the higher side than the last year. The increase in the Milk Prices could not be passed to the customers, resulting into lower margins.

In the Current fiscal availability of milk have improved which augurs well for Dairy Sector.

HUMAN RESOURCES

The Company regards its employees as valuable asset and continuously reviews and evolves policies and procedures to attract and retain its pool of technical and managerial personnel through a conducive work environment.

As at 31st March, 2026, the Company had a total workforce of 419 persons.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may contain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statement as important factors could influence the Companys operations such as Government policies, political and economic developments and such other factors are risk inherent to the Companys growth.

By order of the Board of Directors
	For Modern Dairies Limited
	Krishan Kumar Goyal
	Chairman & Managing Director
Place: Chandigarh	DIN:00482035
Date: 11th August, 2026