Dairy stocks jump up to 4% after Amul, Mother Dairy hike milk prices by ₹2 per litre 

Shares of dairy companies opened higher on Thursday, in line with gains in the broader market, after Amul and Mother Dairy increased milk prices by ₹2 per litre across multiple variants effective May 14.

The hike marks the first major price revision in nearly a year and comes amid rising milk procurement costs, higher cattle feed prices, elevated transportation expenses, and increased packaging costs due to the ongoing West Asia crisis.

Following the development, shares of Hatsun Agro Product  rose as much as 2.64% to ₹968 on the BSE, taking the company’s market capitalisation to around ₹21,185 crore. Shares of Dodla Dairy  also gained 1.2% to ₹1,100, pushing its market value to approximately ₹6,530 crore.

Among other dairy stocks, Parag Milk Foods  climbed nearly 4% in early trade to touch ₹229.95, valuing the company at about ₹2,757 crore. Similarly, Heritage Foods  advanced 1.8% to ₹340.55, with its market capitalisation rising to around ₹3,110 crore.

Meanwhile, the BSE Sensex was trading 239.49 points, or 0.32%, higher at 74,848.47, while the NSE Nifty 50 gained 104 points, or 0.45%, to trade at 23,517.

Amul, Mother Dairy hike milk prices

Amul on Wednesday raised milk prices by ₹2 per litre, marking its second price hike within a year, citing an increase in input and procurement costs. The Gujarat-based dairy cooperative said the revision was necessary to partly pass on the higher operating expenses to consumers.

The move by India’s largest organised milk seller is expected to add pressure on food inflation, which has already been witnessing an uptick amid the ongoing tensions in West Asia.

Separately, Mother Dairy also announced a ₹2 per litre increase in prices of its liquid milk variants, effective May 14, 2026, to partially offset rising input costs. The company made last price revision in late April 2025.

Retail food inflation had crossed the 4% level in April, and the latest milk price increase is likely to further strain household budgets.

Milk procurement inflation may squeeze dairy margins

Domestic brokerage ICICI Securities believes that dairy companies may continue to face pressure from rising freight and input costs unless they implement retail milk price hikes of around ₹4-5 per litre. The agency, in a report released in March, said milk procurement costs, which had already remained elevated during the first nine months of FY26, accelerated further by nearly ₹3-4 per litre in the March quarter.

The brokerage linked the sharp increase to a weaker-than-usual flush season, higher butter exports, reduced domestic inventories of butter and skimmed milk powder (SMP), and expectations of strong summer demand in 2026.

It added that the increase in retail milk prices has not kept pace with the surge in procurement costs, limiting the ability of dairy companies to fully pass on inflationary pressures.

According to the brokerage, companies appear to be postponing sharper price hikes to avoid impacting consumer demand during the peak summer season. Consequently, gross margins are expected to remain under strain in Q4FY26 and could continue to face pressure in Q1FY27 as well.

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