ICICI Securities: Dairy Sector Outlook CY21- Sector At Cyclical High Margins
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ICICI Securities Report
Due to reduction in milk procurement prices, the dairy companies under ICICI Securities’ coverage reported life-high margins in CY20.
While there was some impact on revenues due to lower sales to Hotels, Restaurants, Cafes and institutions, the B2C sales were not impacted in CY20.
Milk procurement prices declined due to (1) reduction in demand from HoReCa and B2B consumers and (2) normal monsoon as well as flush season. Global SMP prices declined c.10% which also impacted milk prices in India. In H1 CY21, ICICI Securities model the dairy companies to continue to report life-high margins.
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