Dodla margins crushed: consolidated PAT down 35% YoY to ₹41 Cr as milk costs surge

Dodla Dairy's Q1 FY27 consolidated revenue rose 19.0% YoY to ₹1,197.94 Cr, but net profit fell 35.4% to ₹40.64 Cr (and 41.7% sequentially from ₹69.73 Cr), with net margin compressing to 3.4% from 6.1% a year ago. There were no exceptional items on either side, so raw and adjusted YoY profit growth are identical — the decline is entirely operational. The headline topline is also flattered by consolidation of HR Food Processing (effective Aug 2025), which management itself flags renders the YoY numbers non-comparable; standalone revenue grew just 6.1% to ₹955.66 Cr. The squeeze sits squarely on the raw-material line: consolidated cost of materials consumed jumped ~32% YoY to ₹940.61 Cr, far outpacing the 19% revenue rise, reflecting elevated milk procurement prices. The pain is starkest in the core standalone India business, where PAT collapsed 65% YoY to ₹21.75 Cr; overseas subsidiaries (₹210.28 Cr revenue, ₹18.23 Cr net profit) plus HR Food cushioned the group figure. That leaves a ~30-point gap between standalone (-65%) and consolidated (-35%) profit trends — readers should note the consolidated print understates how hard domestic dairy was hit. On the Q4 FY26 concall management guided to low-to-mid-teens FY27 revenue growth with a 50-100 bps gross-margin recovery as procurement costs normalized. Q1 delivers the topline (reported +19%, though inorganic; standalone +6% at the low end of the 8-9% organic India target) but decisively misses on margins — procurement costs rose rather than eased, directly contradicting the recovery thesis. No published street consensus for the quarter was found. Alongside results the board approved a ~2% minority stake in premium antibiotic-free D2C brand Sids Farm (FY26 turnover ₹240 Cr) for ₹11.65 Cr cash from internal accruals — immaterial to financials but consistent with the stated 'selective acquisitions' stance and a foothold in premium/D2C dairy. The earnings call is set for 27 July 2026.