Milkfood Limited

Consumer Defensive — Packaged Foods · NSE

₹86.03−₹1.29 (−1.48%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Milkfood Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Milkfood Limited manufactures and sells dairy products in India. The company offers pure ghee, skimmed and whole milk powder, and dairy whitener products.

IndustryPackaged Foods

SectorConsumer Defensive

Employees113

Annual revenue₹387 Cr

How does it make money?

Turns over ₹387 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 113 employees supports ₹3.42 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin19.8%

Net margin11.5%

Revenue / employee₹3.42 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

TATA CONSUMER PRODUCT LTDP/E 59.3x · ROE 7.5%

DABUR INDIA LTDP/E 34.7x · ROE 17.2%

What is its competitive advantage?Some evidence

ROCE of 25.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE25.6%

ROE19.8%

Peer median ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -13% while net margin moved +423% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-13%

Margin effect+423%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.49 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

70/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

4.9x

Sector Median

51.7x

median of 4 sector peers

🟢Against its sector it trades 90% below the peer median of 51.7x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

51.7x median of 4 peers · -90%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

4.9x

P/B

0.94x

EV/EBITDA

4.3x

PEG

0.07

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.9% to 19.8% over 3 years.
Return on equity is rising
ROE has improved from 7.3% to 19.8%.
Return on capital is rising
ROCE has improved from 8.7% to 25.6%.
High return on capital employed
ROCE of 25.6% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 74% against revenue growth of -13% — customers are taking longer to pay.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 74% against revenue up -13% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹109 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 25% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.6% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 5.9% to 19.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 90% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 74% against revenue up -13%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 18%✓ 19.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹109 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 23%✓ 25.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 5.3x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

9 / 10 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high

Price history

Quick Metrics

8 good · 2 neutral · 1 weak

Market Cap

₹220 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.9x

Cheap

Cheap against the generic band

P/B Ratio

0.94x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹17.51

Profitable

Profitable on a per-share basis

ROE

19.8%

Strong

Strong capital efficiency

ROCE

25.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.49x

Low

Conservative leverage

Revenue Growth (YoY)

10.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

879.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹109 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹86.03

Operating Margin

2.3%

Weak

Thin margins leave little room for error

Net Margin

10.7%

Good

Strong bottom-line conversion

Current Ratio

1.69

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

68%

Mid-range

Technical Snapshot

RSI (14)

64.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹445 Cr	₹437 Cr	₹428 Cr	₹387 Cr	-4.6%
EBITDA	₹26 Cr	₹26 Cr	₹25 Cr	₹76 Cr	+42.7%
EBITDA Margin	5.9%	5.9%	5.9%	19.8%	—
PAT (Net Profit)	₹10 Cr	₹7 Cr	₹5 Cr	₹44 Cr	+65.6%
EPS	₹4.75	₹3.57	₹1.86	₹17.3	+53.8%
ROE	7.3%	4.1%	2.6%	19.8%	—
ROCE	8.7%	8.2%	7.6%	25.6%	—
Total Debt	₹122 Cr	₹116 Cr	₹118 Cr	₹110 Cr	-3.2%
Free Cash Flow	-₹38 Cr	₹17 Cr	₹15 Cr	-₹109 Cr	—

🔴 Revenue has shrunk at 4.6% a year over 3 years.

🟢 EBITDA has grown at 42.7% a year over 3 years.

🟢 EBITDA Margin has risen from 5.9% to 19.8% over 3 years (+13.9 pts).

🟢 PAT (Net Profit) has grown at 65.6% a year over 3 years.

🟢 EPS has grown at 53.8% a year over 3 years.

🟢 ROE has risen from 7.3% to 19.8% over 3 years (+12.4 pts).

🟢 ROCE has risen from 8.7% to 25.6% over 3 years (+16.9 pts).

🟢 Total Debt has shrunk at 3.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹396 Cr

Total Liabilities

₹172 Cr

Total Debt

₹110 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹105 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.8%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

2 mixed4 general

Milkfood Limited (MLKFOOD) Share Price NSE

TechGraph, 07 Oct

Milkfood Ltd. Share Price Falls 9.41%: Price, Sector View

Univest, 18 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Milkfood Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Milkfood EGM set for Jul 27 to approve warrant allotment

scanx.trade, 24 Jun

Parag Milk Food Standalone June 2026 Net Sales at Rs 920.47 crore, up 10.83% Y-o-Y

Moneycontrol.com, 11 Aug

Milkfood Q1 FY27 Results: Revenue & PAT Highlights

Univest, 07 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟢Financial HealthStrong14.5/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive13/15

🔴RiskHigh4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 18%19.8%
✗Free cash flow remains positive-₹109 Cr
✓Debt / EBITDA stays below 2x1.4x
✓ROCE stays above 23%25.6%
✓Interest cover stays above 4x5.3x