Dodla Dairy shares fall 5.1% amid four-day losing streak

INDIA – Dodla Dairy, a prominent player in India’s FMCG sector, saw its stock price decline by 5.1% on Wednesday, marking the fourth consecutive day of losses. 

The Hyderabad-based company, known for its extensive network of milk processing plants and chilling centers, has been grappling with market challenges despite a strong financial performance earlier this year.

The recent drop follows a volatile period for Dodla Dairy’s stock, which closed at approximately US$13.70 per share on the National Stock Exchange. 

This decline aligns with broader market trends, where many stocks have faced downward pressure. The company’s stock is now trading below its 20-day, 50-day, 100-day, and 200-day moving averages, signaling a bearish trend in its price action. 

Earlier this month, the stock fell below its 200-day moving average of US$14.03, a technical indicator often viewed as a negative signal by investors.

Despite the current downturn, Dodla Dairy has shown resilience in the past. 

The company reported a robust third-quarter performance for the period ending December 2024, with a net profit of US$7.62 million, a 53.8% increase from US$4.96 million in the same quarter the previous year. 

Revenue also grew by 20.7% to US$108.12 million, driven by strong demand for its milk and value-added products like curd, ghee, and flavored milk. 

“Our focus on optimizing procurement and expanding our product mix has significantly boosted our margins,” said a company spokesperson in January, reflecting confidence in its operational strategy.

The company, which operates 14 processing plants and 150 chilling centers across 11 states, has been expanding its footprint. 

In February, Dodla Dairy announced plans for a new plant in Maharashtra to enhance its domestic and international growth. 

“We expect continued revenue growth in the coming fiscal year,” stated Sunil Reddy Dodla, Managing Director, highlighting the company’s ambition to maintain its 7.5% market share in a competitive dairy industry.

However, rising competition from larger players like Amul and the threat of cheaper dairy substitutes have added pressure. 

The stock’s year-to-date return stands at a loss of 9.52%, contrasting with its impressive three-year return of 131.98%. 

Investors remain cautious as the dairy sector navigates a challenging environment, with the broader market showing more declines than advances. 

Dodla Dairy’s ability to sustain its growth trajectory while addressing these headwinds will be critical in restoring investor confidence in the coming months.

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