Raw milk production in India is expected to slow to 4 per cent this fiscal, down from a 5 per cent compound annual growth rate between FY20 and FY25, as El Niño-linked weather disruptions and rising fodder costs weigh on cattle yields. Yet organised dairy companies are projected to grow revenues by 13-15 per cent, up from around 11 per cent last year, highlighting how branded processors are increasingly relying on pricing and higher-value products rather than milk volumes to sustain growth.
For organised dairies, the challenge this year is likely to be securing enough milk rather than finding consumers. While weather-led disruptions are constraining supply, resilient demand for everyday dairy products, phased price increases and faster growth in value-added offerings are expected to keep revenue growth well ahead of milk production. The shift underscores how organised dairies are becoming increasingly dependent on product mix and branding, rather than milk volumes alone to drive growth.
CRISIL Ratings expects organised dairies to post 8-10 per cent volume growth this fiscal despite tighter milk supplies. Average retail prices are expected to rise 5-6 per cent, helping companies offset higher procurement costs while keeping operating margins broadly steady at around 4 per cent.
