11-12% growth in FY’23 for dairy sector

For the second straight year, India’s organised dairy sector is expected to witness double-digit growth, propelled by healthy demand for value-added products (28% of overall sales). According to a report by Crisil Ratings, the sector is expected to see 11-12% growth in FY’23, albeit revenue growth of the organised dairy sector this financial year will be a notch below the last fiscal’s 13% growth.

“We expect demand for ice cream, curd and flavoured milk items to peak this summer due to inordinately hot temperatures. The last two summers were affected by COVID-19. That, along with stable demand growth for household consumption-driven products such as ghee and paneer, strong recovery in the HoReCa (hotels, restaurants and cafe) segment, and price hikes of last fiscal will drive 13-14 per cent revenue growth in VAP this fiscal,” Crisil Ratings Director Aditya Jhaver said. He added that liquid milk sales should sustain 9-10% revenue growth this fiscal even as volumes remain steady. This is on account of the full-year benefit of two price hikes last fiscal.