Milky Mist plans to use its IPO funds for expansion over 18-24 months. CEO K Rathnam said, “Demand for value-added dairy products remains robust as disposable incomes improve.” The company reported a 43% revenue jump in H1 FY27. It now focuses on growth through new products like high-protein lactose-free milk.
The company will channel the IPO funds into project capex, marketing initiatives and plant expansion, with purchase orders already placed and advance payments made, said K Rathnam, whole-time director and CEO, Milky Mist, in an interaction with FE. While there are no major fresh capex plans for the immediate term, the company will continue with routine capital expenditure of Rs 50-60 crore, he said. Milky Mist had raised Rs 1,553 crore through the capital markets in August, comprising a fresh issue of Rs 1,428 crore and an offer for sale of Rs 125.00 crore. The fresh issue was earmarked for debt repayment, expansion of manufacturing capacity and retail infrastructure improvement.
“Demand for value-added dairy products remains robust as disposable incomes improve,” Rathnam said, identifying yoghurt, paneer, cheese and sweetened condensed milk as key growth drivers. The ongoing festive season is also expected to support sales, he said.
Milky Mist reported a 43% year-on-year increase in revenue to Rs 2,062.8 crore in H1 FY27, compared with Rs 1,447 crore in the corresponding period last year. EBitda grew 63% to Rs 310.1 crore from Rs 190.4 crore, with margins expanding to 15.03% from 13.2%. Profit after tax rose rose nearly four-fold to Rs 142.6 crore, taking the PAT margin to 6.9% from 2.4%.
The company is, however, navigating inflationary pressures arising from higher commodity prices, particularly feed and fodder, as well as El Niño-related uncertainties and geopolitical tensions. It has taken price increases of up to 10% in select categories, largely during August and September, with the full impact expected to be reflected in Q3FY27, Rathnam said.
He said the company would not pursue further price increases for now, citing its diversified product portfolio and ability to absorb moderate input cost inflation. “Price elasticity is a factor we are aware of. Beyond a certain point, there would not be acceptance from consumers for price hikes,” he said.
The company has also increased farmer payouts by 10-11%, while taking calibrated price increases to balance procurement costs and consumer affordability. Unlike companies heavily dependent on pouch milk, Milky Mist has greater flexibility in pricing its value-added products, Rathnam said.
Product innovation is another pillar of its growth strategy. The company launched high-protein lactose-free milk in October, which has already been listed on major e-commerce platforms. Encouraged by initial consumer response, it is exploring variants such as chocolate and strawberry flavours.
Securing milk supplies will remain equally important. Milky Mist has increased procurement volumes by around 30%, supported by an expanding farmer network, timely payments, and initiatives such as artificial insemination and facilitating bank loans for small dairy farmers.