Parag Milk Foods Q1 net profit flat at Rs 27.5 cr

Parag Milk Foods Ltd, which sells its products under Gowardhan brand, on Friday posted a flat consolidated net profit of Rs 27.5 crore during the first quarter of 2019-20 fiscal on higher expenses.

The company's net profit stood at Rs 28.26 crore in the same quarter previous fiscal, it said in a regulatory filing.

Total income increased to Rs 632.52 crore on a consolidated basis during April-June quarter of the current fiscal from Rs 551.2 crore in the year-ago period.

Expenses increased to Rs 595.49 crore from Rs 513.49 crore in the said period.

Commenting on the performance, Parag Milk Foods Chairman Devendra Shah said the first quarter witnessed a subsequent increase in milk prices owing to a drought scenario and a delayed monsoon which have posed challenges to the farmer community in the form of increased feed costs.

As a result, the company's gross margin was compressed.

"We have been able to successfully pass on the increased raw milk prices by reducing trade schemes and discounts as well as increasing the consumer prices of our products," he said.

Despite the pressure on gross margins, EBITDA and PAT margins continue to remain on track as per the company's Vision 2020, he added.

Shares of the company dropped 0.34 per cent to settle at Rs 220.75 apiece on the BSE on Friday.