Organised Dairy Sector Expected to Grow by 200-400 Basis Points in FY27: Crisil
- IBEF
- June 30, 2026
India's organised dairy sector is expected to witness stronger growth in FY27, with revenue growth projected to accelerate by 200-400 basis points over the estimated 11% growth recorded in FY26, according to Crisil Ratings. The outlook is based on an analysis of 37 dairy companies accounting for around 60% of the organised dairy segment's revenue. Growth is expected to be supported by sustained volume expansion of 8-10% and staggered price increases driven by higher raw milk procurement costs. Demand for essential dairy products such as milk, butter and ghee is expected to remain resilient, while rising consumer preference for value-added products will further strengthen industry performance. Despite higher input costs, dairy companies are expected to maintain healthy operating profitability through calibrated price revisions, supported by strong balance sheets, healthy cash accruals and stable working capital cycles.
The sector is also expected to benefit from increasing demand for value-added dairy products, particularly protein-rich and probiotic offerings, reflecting growing health awareness among consumers. Although these products currently account for less than 5% of the overall market, they are projected to grow at more than 20% in the coming years. Crisil noted that raw milk production growth may moderate to around 4% in FY27 due to lower cattle yields and rising fodder costs, leading to an expected 4-5% increase in milk procurement prices and average retail price increases of 5-6% across dairy product categories. Nevertheless, companies are expected to sustain capital expenditure in line with the average of the past four years, strengthening production capacity and supporting long-term sectoral growth. The positive outlook highlights the resilience of India's organised dairy industry and its growing role in meeting evolving consumer demand while supporting agricultural and rural development.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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