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Dairy Outlook 2022 - Milk Prices Are Expected To Increase: ICICI Securities

Dairy Outlook 2022 - Milk Prices Are Expected To Increase: ICICI Securities

<div class="paragraphs"><p>A student pours milk into a glass to prepare a cup of coffee during a class. (Photographer: Jeremy Piper/Bloomberg)</p></div>
A student pours milk into a glass to prepare a cup of coffee during a class. (Photographer: Jeremy Piper/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

As highlighted in our CY21 outlook report, dairy companies under our coverage continued to report life-high margins in CY21. While there was some impact on revenues in H1 CY21 due to severe second wave of Covid-19 (April-June), demand returned stronger due to large vaccination drives across the nation in H2 CY21.

Milk procurement prices increased due to-

  1. inflation in animal feed prices and

  2. revival in demand from business-to-business customers.

Global skim milk powder prices increased ~13% which also impacted milk prices in India. However, we expect milk procurement prices to further increase in H1 CY22, leading to price hikes by all dairy companies.

In CY22, we model dairy companies to report a decline in margins.

Click on the attachment to read the full report:

ICICI Securities Dairy Outlook 2022.pdf

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