Chennai: India’s dairy major Hatsun Agro is navigating a mix of strong demand and rising input costs, with management signaling steady growth despite near-term cost pressures.
The company indicated it is nearing a Rs 10,000 crore revenue run rate, with management suggesting the outcome could vary marginally. As highlighted in the interview transcript given by Mr. R G Chandramogan, Chairman of the Company to CNBC TV, growth has been driven by improving volumes and better integration of acquired operations, which are now stabilizing under the company’s control.
Milk procurement prices have risen by around 8 percent, largely due to a shortage of milk fat triggered by exports. The company has responded with product price increases of roughly 6 percent, implemented recently. This pricing adjustment reflects an effort to balance rising input costs without disrupting demand.
Management flagged rising packaging costs as a key concern, with prices of certain materials expected to increase by 30 to 40 percent. Supply constraints, including availability of inputs like gas for production processes, are also creating short-term operational challenges, though the company expects to manage in the near term.
Hatsun Agro continues to expand beyond Tamil Nadu, with nearly 45 percent of sales now coming from outside the state, expected to reach 50 percent in two years. The company’s direct distribution model, supported by around 4,500 outlets, is helping maintain margins that are significantly higher than peers while improving capacity utilization. The company remains cautiously optimistic about growth, balancing strong demand trends with evolving cost dynamics.
Disclaimer: This article is based solely on information available in the company’s regulatory filing, including the interview transcript, and does not include independent verification or additional reporting beyond the provided document.
