The Daily Brief A glass half full for Indian dairy
Nov 13, 2025
The discussion dives into the challenges facing India's dairy sector with significant variations in quarterly performance among key companies. Excessive monsoon rains have disrupted milk supply, affecting profit margins. Hatsun Dairy shines with its value-added products driving profitability due to strategic investments. Transitioning to green energy is another focal point, examining how India plans to finance renewable projects and the roles of major power finance institutions. It raises intriguing questions about sustainability and policy impacts on future growth.
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Weather And Geography Drove Divergent Dairy Results
- India's dairy performance diverged across firms due to region, product mix, and weather disruptions.
- Heavy Q2 rains reduced milk supply, spiked raw milk prices, and squeezed margins for regionally concentrated players.
Value-Added Products Boost Margins
- Value-added products (VAP) deliver higher margins and insulated Hatsun from raw milk inflation.
- Hatsun's strong ice-cream and refrigerated supply chain translated into superior profitability versus peers.
GST Cuts Favor Value-Added Dairy
- Recent GST cuts lowered taxes on ghee, butter and cheese, improving VAP competitiveness.
- Companies with heavy VAP exposure stand to gain more from the tax change than pure milk sellers.