The brokerage has set a price target of ₹175 per share, implying a potential upside of around 25% from the upper end of the company’s IPO price band of ₹140.
The stock is currently commanding a 14% premium over its IPO price in the grey market, signalling a strong listing for the company.
DAM Capital said Milky Mist is India’s only pure-play value-added dairy company of scale, with an almost 100% value-added dairy products (VADP) portfolio spanning more than 20 categories, including paneer, cheese, curd, yoghurt, butter, ghee and ice cream.
The brokerage pointed to Milky Mist’s market position across key categories. It is India’s largest private packaged paneer brand, with a 19% share of the organised market, and the largest private packaged cheese brand in South India, with around 12% organised-market share.
It is also among the top two private packaged yoghurt brands nationally, with a 13% organised-market share, according to DAM Capital.
The company’s business model is supported by a farm-to-shelf value chain spanning 74,654 farmers, 3,907 automated milk collection units, an in-house cold-chain fleet and more than 3.75 lakh retail touchpoints, the brokerage said.
Milky Mist’s revenue grew at a 31.3% CAGR between FY24 and FY26 to ₹3,140 crore, the fastest growth among its listed peers, DAM Capital said.
Speaking to CNBC-TV18 earlier, Whole-time Director and CEO K Rathnam said the dairy industry is growing at around 12-20% in value terms, while Milky Mist is expanding at more than 30%. The company’s volume growth is around 25-30%, with value growth exceeding 30%, he said.
Milk procurement costs remain a key variable for the company, with prices typically moving in cycles over two to four years.
However, Rathnam said the company’s focus on value-added products such as paneer and cheese, which carry higher margins than liquid milk, provides some cushion against fluctuations in raw milk prices.
He also pointed to Milky Mist’s milk-balancing system as a factor supporting margins.
Within the company’s portfolio, paneer and cheese command the highest margins, while ghee, followed by yoghurt and ice cream, have relatively lower margins. Rathnam said this margin profile is broadly in line with the wider dairy industry rather than reflecting a company-specific weakness.
Milky Mist manufactures a range of dairy products, including cheese, butter, paneer, ghee, yoghurt and ice cream. The company plans to use proceeds from the fresh issue to repay debt and expand and modernise its flagship manufacturing facility at Perundurai in Tamil Nadu.
