In a significant move within the dairy sector, India-based Dodla Dairy has announced its agreement to acquire HR Food Processing, a local competitor, for Rs 2.71 billion ($31.6 million).
The company provided details of this acquisition in a stock exchange filing. It characterized the deal as “strategic,” emphasizing its potential to enhance Dodla Dairy’s market presence in the rapidly developing region of eastern India.
Dodla Dairy’s Managing Director, Dodla Sunil Reddy, expressed enthusiasm about the eastern Indian market. He stated, “As a market, eastern India is a very exciting market for the dairy industry with faster growth as compared to the national average.” Reddy elaborated that this area supports a substantial population where milk consumption has considerable room for expansion, largely driven by high urbanization rates and robust GDP growth.
HR Food Processing is renowned for its Osam brand and operates extensively in states like Bihar and Jharkhand, contributing to the eastern Indian dairy market.
This company utilizes a “vertically integrated” supply chain model. Notably, Osam’s network includes over 25,000 dairy farmers, boasting a daily milk processing capability of approximately 110,000 liters, facilitated by 1,000 collection centers along with 19 chilling facilities.
According to the statement, its two processing plants possess the capacity to handle up to 180,000 liters of milk each day. This efficiency aligns perfectly with Dodla Dairy’s operational model.
Reddy further commented, “We see tremendous synergies with Osam, which, when combined with Dodla’s strong operational experience, will enable us to take this to the next level.” This collaboration promises not only to elevate operational standards but also to enhance service delivery in the eastern region.
For the financial year 2025, Osam reported revenues of Rs 2.83 billion, achieving a commendable 25% gross margin alongside a 5% EBITDA margin. Additionally, milk sales accounted for 72% of its total sales, while value-added products, including curd, lassi, paneer, sweets, and ghee, contributed the remaining 28%.
Upon the successful completion of this acquisition, HR Food Processing is set to operate as a wholly owned subsidiary of Dodla Dairy. It is essential to note that the company’s current operations are confined to the Indian market.
Founded in 1995, Dodla Dairy specializes in the procurement, processing, and distribution of milk and a variety of dairy products. Its diverse offerings include milk, buttermilk, ghee, curd, paneer, flavored milk, and sweet items such as doodh peda and ice cream.
Moreover, Dodla Dairy’s operations span five states, with products distributed across 13 states supported by an extensive network of 190 milk chilling centers and processing plants. As of March 31, 2025, the company maintained 839 retail parlors located in Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka. Additionally, it has expanded its reach to operations in Uganda and Kenya.
