Parag Milk Foods Bets Big on Health, Reports Record Q2 FY26 Revenue
Overview
Parag Milk Foods is aggressively expanding into health and nutrition, driven by its protein brand Avvatar, which now holds a significant market share. The company reported record quarterly revenue of ₹1,008 crore in Q2 FY26, up 16% year-on-year, while maintaining strong growth in its core dairy products. This strategic shift targets India's growing protein deficit and aims for international market penetration.
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Strategic Pivot to Health and Nutrition
Parag Milk Foods Ltd. is sharpening its focus beyond traditional dairy, aggressively leaning into protein, premiumisation, and clean-label products. This strategic shift marks a decade-long evolution, moving the company from a dairy producer to a multi-brand FMCG entity with a significant presence in health and nutrition. The rapid scaling of its whey protein brand, Avvatar, exemplifies this pivot.
Record Financial Performance
The company posted its best-ever quarterly revenue, reaching ₹1,008 crore in the second quarter of fiscal year 2026. This represents a 16% increase year-on-year, with volumes growing by 10%. For the first half of FY26, revenue stood at ₹1,859 crore, a 14% year-on-year rise. Earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a 12% jump to ₹155 crore during the first half.
Avvatar Leads Protein Push
Avvatar, Parag's whey protein brand, has experienced exponential growth, expanding nearly six-fold in the last three years. It now commands approximately 10% of India's whey protein market share. Parag Milk Foods highlights its unique position as the sole manufacturer of whey protein in India for the sports nutrition segment. This segment is a key driver of the company's 'new-age' business, which includes premium brands like Pride of Cows and Avvatar.
Core Business Strength Remains
Despite the strategic push into new-age products, Parag Milk Foods' core dairy categories—ghee, cheese, and paneer—continue to be substantial revenue generators. Together, these segments account for 59% of total revenue and achieved 23% value growth and 14% volume growth in Q2 FY26. These established categories are still expanding at an impressive 22-25% annually.
Margin Improvement and Debt Reduction
Profitability saw an uplift, with gross margins improving to 25.8% from 23.6% a year prior. EBITDA margins edged up slightly to 8.9% from 8.8%. The company generated ₹99 crore in operating cash flows in the first half of FY26 and successfully reduced its net debt by ₹125 crore. Consolidated net debt-to-EBITDA stands at a manageable 1.4x, with net debt-to-equity improving to 0.4x.
International Ambitions
A smaller but fast-growing part of the portfolio, the 'new-age' business comprising premium dairy and protein products, now contributes about 9% of overall revenue, up from 6% last year. This segment grew by an impressive 79% year-on-year in Q2 FY26. Looking ahead, Parag Milk Foods aims for its new-age businesses to constitute 25% of total revenue within four to five years. The company is also planning to diversify Avvatar into ready-to-drink formats and protein snacks. Furthermore, a new subsidiary in Dubai has been established to tap into the Gulf and East Africa markets.
