|
PNN
New Delhi [India], January 27: Milkfood Ltd., one of India's established dairy companies with a strong legacy in value-added dairy products, has informed the stock exchanges about the sale of its Moradabad plant located at Agwanpur, Uttar Pradesh undertaking for a consideration of 130 crore. The company has signed an Agreement to Sell with the buyer, marking a decisive step in its ongoing business reorganisation and balance-sheet strengthening strategy. The transaction has resulted in a net inflow of 116.11 crore, post taxes. The sale has generated a net profit of 78.04 crore on land, while the company has reported no loss on the sale of plant and machinery and a profit of 7.54 crore on buildings. The reversal of 37.37 crore from revaluation reserves is a non-cash accounting adjustment. Focused Deleveraging to Improve Financial Health Milkfood Ltd. plans to deploy a significant portion of the proceeds towards debt repayment. The company intends to repay loans amounting to 75 crore, which is expected to lead to an annual reduction in finance costs of approximately 9.25 crore. In addition, savings on plant overheads are estimated at 8.5 crore annually, resulting in a combined benefit of nearly 17.75 crore. These measures are expected to translate into a net EPS accretion of approximately 7.25 per share (face value 5), underlining the immediate financial impact of the transaction. Commenting on the development, Mr Sudhir Avasthi, Managing Director, Milkfood Ltd., said, "This transaction reflects a disciplined approach to capital allocation. By monetising a non-core asset, we are meaningfully reducing debt, improving cash flows and creating financial headroom to pursue growth opportunities. Our focus remains on building a stronger, more agile Milkfood with sustainable profitability." Reallocating Capital Towards Growth With a cleaner balance sheet and lower leverage, Milkfood Ltd. is sharpening its focus on expanding high-growth and high-margin dairy categories. The company is actively planning investments in new capacities, including ice-cream manufacturing and evaluating opportunities in cheese and butter segments that continue to see strong consumer demand across urban and semi-urban markets. Operationally, Milkfood also plans to scale up production at its Patiala plant, with the company estimating that overall turnover could reach 750 crore by FY 2026-27, with an expected EBITDA margin of around 7%. A Stronger Platform for the Future The Moradabad asset sale represents more than a one-time transaction-it marks a strategic reset. With lower debt, improved earnings visibility and a sharper focus on future-ready categories, Milkfood Ltd. believes it is well-positioned to enhance shareholder value and strengthen its competitive standing in India's evolving dairy market. As the company moves ahead with financial discipline and growth-led investments, Milkfood remains committed to long-term value creation for investors, partners and consumers alike. About Milkfood Ltd Milkfood Ltd. is one of India's trusted dairy brands, with a rich legacy of delivering high-quality dairy products to households and institutions for decades. Known for its strong focus on purity, consistency, and taste, the company has built deep expertise across the dairy value chain from sourcing and processing to packaging and distribution. With a portfolio that reflects both traditional Indian preferences and evolving consumer needs, Milkfood continues to strengthen its presence across key markets while staying rooted in the values of trust, quality, and innovation that define its brand. (ADVERTORIAL DISCLAIMER: The above press release has been provided by PNN. ANI will not be responsible in any way for the content of the same.)
|
