Milky Mist Dairy Food Ltd

Milky Mist Dairy Food Ltd

View :Milky Mist is a good company with strong management (former Amul MD as CEO) growing at >25% CAGR for the last 5 years backed by higher margin products. It is now the leading player in cheese and yogurt in the southern states (69% of the revenues) and is the largest paneer manufacturer in India (never sold milk, started with paneer since inception).

Milky Mist at a valuation of ~3.4x Sales is much higher compared to peers like Hatsun Agro 2.0x (similar margin profile) and Dodla Dairy 1.5x (slightly lower margins because of higher mix of Milk in products).

FY 26 Numbers

Sales : 3,168 Cr.

Gross Margins : 33%

EBITDA : 429 Cr. | 14%

PAT : 127 Cr. | 4%

Auditor : VKS Aiyer & Co (other companies - Pricol Ltd (8K Cr M. Cap)

DRHP Filed On : July 21, 2025

BRLM : JM Financial, Axis Capital & IIFL Capital Services.

IPO : Fresh Issue of 1,428 Cr consisting of debt repayment of 497 Cr, capex of 469 Cr, deployment of Visi Cooler worth 155 Cr and the rest for GCP. OFS of 125 Cr providing partial exit to promoters Sathishkumar and Anitha.

What does the company do?

• Milky Mist is a Tamil Nadu premium value added dairy products company. Instead of selling milk which is relatively easier to sell and can help inflate the top line and distribution, they started with Paneer in 1998 and are now the largest private packaged paneer brand in the organized market with a market share of 19% in India. Their installed capacity for paneer stands at 192 metric tons, largest in India.

• Over the years they’ve built a portfolio of value added milk based products like cheese, curd, butter, ghee, yogurt, whey and recently ventured into ice cream, condensed milk, chocolates, and high-protein dairy under the Misty Lite brand. In 2025, they acquired Asal Foods (Ready to Eat) and Briyas Foods (Tofu). (margin profile of the products attached)

• Revenue bifurcation by products for FY 26 was Paneer 29%, Cheese 16%, Curd 13%, Ice cream 10% and other products 32%. They are the largest private packaged cheese brand with a market share of 12% and 7% in curd in South India.

• Their top 3 SKUs contribute 25% of sales and top 10 contribute 46%, the company derives 69% of revenue from the 5 southern states, with Karnataka and Tamil Nadu being the largest at 24% each followed by Kerala 11%, Telangana 7% and AP 3%. 4% of the sales comes from export and the remaining 26% from other states.

• They have one manufacturing unit in Perundurai, Tamil Nadu, which is a US FDA approved facility. They source raw milk from 74,654 farmers located in 25 districts across the states of Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka, all within a 400Km radius from their manufacturing facility at Perundurai, Erode District, Tamil Nadu which is a US FDA approved facility.

• Sourcing from dairy farmers decreased to 74% of the procurement with the rest coming from 3rd party dairy operators, Tamil Nadu is still 94.5% of the raw milk procurement.

• The promoter Sathishkumar T (Chairman & MD) has completed his school education till 8th standard, he's still engaged in the day to day management of the company. His father had a milk trading business during the 1990s in Bengaluru.

Findings

• The management team includes Dr. K Rathnam (WTD & CEO) who is responsible for the overall operations of the company, he joined in 2019 and has previously worked at companies like Heinz India as senior manager (quality assurance) and Kaira District Co-operative Milk Producers’ Union Limited (Amul) as MD. Linkedin - https://www.linkedin.com/in/drkrathnam/?originalSubdomain=in

• There are news articles that they were planning to raise 800 Cr from from WestBridge Capital in 2023 at 5,000 Cr valuation, the deal fell through and they borrowed heavily from the banks for their expansion plans, their March 2026 D/E was 3.6x with 1,672 cr of debt.(Total debt would decrease to 894 cr post the offer).

• Debt has increased continuously from 355 Cr. In FY 19 to 1,672 Cr in FY 26. The Fixed assets (gross) has increased from 1,563 cr (FY24) to 2,332 cr (FY26), most of the capex has been spent on Plant & Machinery.

• Their Capex as % of sales for last 3 years were 16%, 25% and 15% respectively. They've planned to pay off 497 Cr of the debt from fresh issue, this will bring down their D/E below 0.5x. The new capex of 469 Cr from fresh issue will be spent largely (~214 cr) on whey protein concentrate and lactose and rest on capacity for processed cheese, fresh cheese for feta and gouda, and yogurt lines.

• Higher share of premium products fetches higher margins esp. non traditional value added daily products like yogurt, cheese, whey etc instead of traditional ones like buttermilk, curd etc. (margin profile attached)

• They are planning to expand to other states and have very good market share across products in home turn of Tamil Nadu and southern states.

• They took the concept of visi coolers from the playbook of Coca Cola and Pepsi & deployed a cumulative 15,062 visi coolers across retailers by FY 26. Visi coolers provide brand visibility and low cost marketing by showcasing products directly to customers at the ground level and also helps push other products. It also had 25,824 ice cream freezers and 573 chocolate coolers, so 41,459 refrigeration units in total.

• Cooperatives still procure 60% of the milk collected from farmers, and hold significant political influence, they would ideally not take it very positively if a private player/Other states' co-operative grows too big especially if it's from a different state. Example being Amul Vs Nandini in Karnataka.

Industry

• India's packaged food market is ~14.2 lakh Cr as on FY 25 and is expected to grow by 10.7% till FY 30, Milk and Value Added Dairy Products constitute 75% of the industry growing at ~9% and 10% CAGR respectively over last 5 years, the remaining 25% divided among snacks, non alcoholic beverages, baked products, confectionery and ready to eat etc. (attached)

• The dairy industry contributes 5% of India's GDP and 25% of agricultural GDP providing livelihood to 8 Cr farmers. India's also world's largest milk producer contributing 25% of the global milk production.

• The dairy industry contributes 5% to the total GDP & approximately 23% to 25% of the agricultural GDP and providing livelihood support to approximately 8 Cr farmers, driving rural income and employment.

• For FY 25, the Indian raw milk market is divided into marketable surplus 65% and self-consumption 35%. Of the surplus, 30-35% is handled by the organised sector, split between co-operatives like Amul, Nandini and Mother Dairy 45-50% and private players like Milky Mist, Hatsun 50-55%.

Milk Co-operatives & Pvt players in different states.

Market size and growth projections

Quick Financials

Peer Coms.

Revenue bifurcation by products.

 Supply Chain

Visi coolers

Current capacity & Utilization