Parag Milk slips after weak Q2 results

Parag Milk Foods fell 2.11% to Rs 153.45 after consolidated net profit declined 6.36% to Rs 28.49 crore on a 11.6% rise in revenue from operations to Rs 640.02 crore in Q2 September 2019 compared with Q2 September 2018.

The result was announced during market hours today, 24 October 2019.

The share of milk products for Q2 is 68% of total revenue, while that of liquid milk stood at 19% and the same for skimmed milk powder stood at 11%.

EBITDA for Q2 stood at Rs 55.50 crore while EBITDA margins stood at 8.7%.

Commenting on theperformance, Devendra Shah, Chairman said "While our brand strength positioned us well to combat milk prices and demand continued to sustain well, our ability to meet the demand was impacted on account of the prolonged monsoons. The excess rain hampered the flow of milk in different area sand led to delays in the feed reaching the market, causing disruptions in milk availability. We have already seen substantial improvement in milk availability from Dusshera and slight moderation in milk pricing has also started. We expect the milk availability situation to improve further going forward on the back of the strong monsoon season and expect milk prices to trend downwards post completion of the Diwali festivities. This makes us confident of delivering a stronger performance in the second half of this yearand delivering a 12-13% topline growth with an EBITDA margin in the range of 9-9.5% for FY20."

Meanwhile, the S&P BSE Sensex was down 42.37 points or 0.11% to 39,016.46.

On BSE, 35000 shares were traded on Parag Milk Foods counter, compared to a 2-week average of 16000 shares. The stock hit a high of Rs 157.65 and a low of Rs 150.2 so far during the day. The stock hit a 52-week high of Rs 279on 2 November 2019 and hit a 52-week low of Rs 131 on 23 August 2019.

Parag Milk Foods is the largest private dairy FMCG company with a pan India presence. The company has manufacturing facilities with in-house technology located at Manchar in Maharashtra, Palamaner in Andhra Pradesh and Sonipat in Haryana. The company sells 100% cow's milk products.

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