Dairy’s Smallcap Stock Dodla Dairy Surges 7% Despite Weak Market Conditions – Here’s the Reason
Despite a challenging market environment, shares of Dodla Dairy, a smallcap company with a focus on dairy products, experienced a remarkable 7% surge, reaching Rs 726 per share on the BSE. This surge came in response to the news that Dodla Dairy’s wholly-owned subsidiary, Orgafeed, has commenced operations at a new cattle feed manufacturing plant in Kuppam, Andhra Pradesh.
As of 11:00 am, the S&P BSE Sensex was down by 364 points or 0.5%, standing at 65,147 levels. However, Dodla Dairy’s stock has shown exceptional resilience this year, recording a 44% increase year-to-date (YTD), in contrast to the 8% rise seen in the Sensex benchmark.
This smallcap company had previously reached a 52-week high of Rs 908 per share on July 24, 2023, and hit a 52-week low of Rs 417 apiece on March 13, 2023.
In an official exchange filing dated October 4, Dodla Dairy disclosed that the newly inaugurated plant boasts a manufacturing capacity of 12,000 tonnes per month. This addition contributes to Orgafeed’s overall capacity of 14,400 tonnes per month, with the Kadapa plant having a capacity of 2,400 tonnes per month.
It’s worth noting that credit rating agency ICRA had previously assigned stable ratings to Dodla Dairy’s long-term and short-term bank facilities. The agency’s assessment stated, “Securities with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.”
In the recently concluded quarter ending in June 2023 (Q1FY24), Dodla Dairy reported a 15% year-on-year (YoY) increase in consolidated revenue, while its earnings before interest, tax, depreciation, and amortization (EBITDA) witnessed an impressive 34% YoY surge, reaching Rs 60.3 crore.
Operating primarily from Telangana, Dodla Dairy offers a diverse range of dairy products including fresh milk, butter, ghee, paneer, curd, and ice-cream, among others. The company has established procurement centers in five states, and its products are available for purchase in 11 states.
Dodla Dairy’s recent surge in stock price highlights the company’s robust performance and strategic expansion efforts, even in a challenging market environment.
