Parag Milk sharpens focus on health and nutrition with protein-led push

Parag Milk Foods is sharpening its push beyond traditional dairy, leaning into protein, premiumisation, and clean-label products, even as its core categories continue to clock double-digit growth.

Much of this momentum is being driven by a strategic shift that executive director Akshali Shah describes as a decade-long journey. “We’ve moved from a dairy company to a multi-brand dairy company, then to FMCG, and now into health and nutrition in a big way,” she said, pointing to the launch and rapid scaling of Avvatar, Parag’s whey protein brand. 

The company, known for brands such as Gowardhan and Go Cheese, reported its best-ever quarterly revenue of ₹1,008 crore in Q2 FY26, up 16% year-on-year, with volumes growing 10%. For the first half of FY26, revenue stood at ₹1,859 crore, a 14% YoY increase, while EBITDA rose 12% to ₹155 crore. Value growth for the half-year was 14%, with volumes up 8%.

Avvatar, Shah said, has grown almost six-fold in the last three years and now commands close to 10% market share in India’s whey protein segment. “We are the only manufacturers of whey protein in India in sports nutrition,” she added.

The pivot comes at a time when India’s dairy market itself has expanded 70% in the past 11 years, making India the fastest-growing dairy market globally. India also remains the world’s largest milk producer, accounting for nearly a quarter of global supply.

What's working right 

Within Parag, the growth engine remains its core categories - ghee, cheese, and paneer - which together contribute 59% of total revenue. In Q2 FY26, these segments posted 23% value growth and 14% volume growth. Shah said these categories are still expanding at 22–25% annually. “Our core categories are still the largest for us,” she said. 

Margins also improved, with gross margin rising to ₹260 crore, or 25.8%, compared to 23.6% a year ago. EBITDA margin edged up to 8.9% from 8.8%. The company generated ₹99 crore in operating cash flows in H1 FY26 and reduced net debt by ₹125 crore during the period. Its consolidated net debt-to-EBITDA now stands at 1.4x, while net debt-to-equity has improved to 0.4x.

A smaller but fast-growing part of the portfolio is its “new-age” business, comprising premium dairy brand Pride of Cows and Avvatar. Together, they now contribute about 9% of overall revenue, up from 6% last year. In Q2 FY26, this segment grew 79% YoY, underlining Parag’s bet on premium and protein-led products.

Shah attributes this shift to a sharp change in consumer behaviour. “People are reading the label. They don’t want additives, emulsifiers, or colours,” she said, adding that awareness has gone beyond Gen Z to older consumers as well. 

She also highlighted a longer-term opportunity: India’s protein gap. “Back in 2016-17, our research showed that 75–80% of India is protein deficient, and a large portion is vegetarian. Dairy becomes a key source of protein for them,” Shah said. 

Looking ahead, Parag expects its new-age businesses to contribute 25% of total revenue over the next four to five years. The company is also planning to expand Avvatar beyond powders into ready-to-drink formats and protein snacks, reflecting what Shah called the growing demand for “on-the-go” nutrition. 

The company has also opened a subsidiary in Dubai to tap into the Gulf and East Africa markets, with Shah expecting traction over the next 18 months.

Even as milk procurement prices firm up, Shah says it has been able to pass on GST benefit to customers, adding that the company continues to grow in both value and volume.