Paneer demand places Milky Mist on a stronger growth track
Milky Mist Dairy Food, an Erode-based dairy company that recently became a listed entity, is focusing on paneer as it expands across India. The company has identified a large opportunity in the category because most Indian paneer production remains outside the organised sector. It expects consumers’ increasing attention to food safety, quality and authenticity to support a shift from loose and unbranded products to packaged paneer.
K Rathnam, the company’s chief executive, described paneer as Milky Mist’s “star product”. The business can currently produce approximately 150 tonnes of paneer each day, which it describes as India’s largest paneer-making capacity at a single site. Capacity utilisation is estimated at 50–60%, leaving room to raise output before major additions to production facilities are required.
Milky Mist estimates that unorganised producers supply roughly 90–94% of India’s paneer, compared with about 6–7% for organised companies. The company holds approximately 20% of the organised paneer market. It estimates the overall paneer market at around ₹97,500 crore, with the category expanding by about 20% a year. Milky Mist’s paneer volumes are growing at approximately 34%.
Regulatory attention is also being directed towards analogue paneer, which is made with vegetable fats rather than milk fat. Milky Mist said closer scrutiny of such products could lead consumers and food-service businesses towards branded paneer produced under controlled conditions. The company expects the move away from analogue paneer to bring annual volume growth for the category closer to 25%.
The company reported a sharp improvement in its first-quarter financial results for FY27. Net profit reached ₹65 crore, compared with approximately ₹7 crore in the same quarter a year earlier. Revenue increased by about 44% year on year, from ₹678 crore to ₹973 crore.
Milky Mist’s wider value-added dairy portfolio includes cheese, curd, ice cream and yoghurt, as well as paneer, ghee, sweets and condensed milk. The company estimates that India’s value-added dairy market is growing by 15–18%, while its own value growth is about 35–38%. It has traditionally been strong in Tamil Nadu and Karnataka and is expanding into other Indian markets to extend its geographic reach and distribution network.
A recent note from CRISIL Ratings said that geographic expansion and deeper penetration could support the company’s growth ambitions. Milky Mist expects to maintain growth of more than 30%, supported by capacity utilisation, entry into new regions, greater penetration in existing markets and a changed product mix.
India’s dairy market is estimated at approximately ₹21,318 billion, with liquid milk accounting for about 65%. Paneer represents around 4.6% of the market, while yoghurt, ghee and ice cream account for approximately 7%, 8% and 2.5%, respectively. Milky Mist is using paneer’s relatively low organised penetration, category growth and available production capacity as it develops its value-added dairy business.
