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Check Before You Invest : Dodla Dairy Ltd

BSE: 543306 NSE: DODLA ISIN: INE021O01019
  |   Sector:  FMCG   |   Industry:  Consumer Food

Snapshot

Q.1 Which industry/sub-sector does Dodla Dairy Ltd belong to?
Dodla Dairy Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.
Q.2 Is Dodla Dairy Ltd a good quality company?
Dodla Dairy Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Dodla Dairy Ltd undervalued or overvalued?
Dodla Dairy Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 27.48 31.78
Price to Book 4.19 4.85
Price to Sales 1.83 1.85
EV to EBITDA 20.73 18.72
Q.4 Is Dodla Dairy Ltd a good buy now?
Dodla Dairy Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Dodla Dairy Ltd?
Dodla Dairy Ltd revenue growth is 15% for FY-2025, which is above its 5-year CAGR of 10.95%, indicating faster growth.

Q.2 Gross Profit margin of Dodla Dairy Ltd?
Dodla Dairy Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.5% for FY-2025, which is above its 5-year median of 10%, indicating increasing margins.

Q.3 Operating Profit Margin of Dodla Dairy Ltd?
Dodla Dairy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.58% for FY-2025, which is above its 5-year median of 8.9% indicating increasing margins.

Q.4 Net Profit Margin of Dodla Dairy Ltd?
Dodla Dairy Ltd Net Profit Margin is 7.39% for FY-2025, is above its 5-year median of 5.9%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 11.5 10
Operating Profit Margin (%) 9.58 8.9
Net Profit Margin (%) 7.39 5.9

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Dodla Dairy Ltd?
Dodla Dairy Ltd Return on Asset is 17.41%, which is above its 5-year historical median of 13.25%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Dodla Dairy Ltd?
Dodla Dairy Ltd Return on capital employed is 28.08% for FY-2025, which is above its 5-year historical median of 23.09%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Dodla Dairy Ltd?
Dodla Dairy Ltd Return on equity is 21.33% for FY-2025, which is above its 5-year historical median of 19.72%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Dodla Dairy Ltd?
Dodla Dairy Ltd Cash conversion cycle is 11 days, above its 5-year historical median of 3 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.39 2.39
ROE (%) 21.33 19.72
ROCE (%) 28.08 23.09
Cash Conversion Cycle 11 days 3 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Dodla Dairy Ltd?
Dodla Dairy Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.49, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Dodla Dairy Ltd?
Dodla Dairy Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Dodla Dairy Ltd?

Q.1 Promoter shareholding and pledge status of Dodla Dairy Ltd?
Promoters hold 58.92% of the Dodla Dairy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Dodla Dairy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Dodla Dairy Ltd vs industry peers?
Dodla Dairy Ltd revenue CAGR is 10.95%, compared to the industry median CAGR of 7.03%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 15 7
Gross Profit Growth (%) 44.1 13.3
Operating Profit Growth (%) 29.7 12.6
Net Profit Growth (%) 60.4 20.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.39 1.2
ROE (%) 21.33 7.22
ROCE (%) 28.08 11.34
Cash Conversion Cycle (days) 11.01 48

Valuation & price assessment

Q.1 Stock return of Dodla Dairy Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 27.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 27.9% -11.8%
Q.2 Valuation ratios of Dodla Dairy Ltd vs historical?
The current P/E ratio of 27.48 is lower than its historical median of 31.78, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 27.48 31.78 26.55
Price to Book 4.19 4.85 2.53
Price to Sales 1.83 1.85 1.43
EV to EBITDA 20.73 18.72 14.38

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