Modern Dairies Q2 Profit Rises Despite Revenue Contraction

Modern Dairies Ltd reported a quarterly net profit of Rs 2.25 crore for the period ending September 30, 2026, alongside revenue from operations of Rs 74.39 crore.

Reader Takeaway: Improved operational efficiency drove bottom-line growth, but the massive Milk Cess legal liability remains a critical risk factor.

What just happened

Modern Dairies released its standalone unaudited financial results for the quarter ended September 30, 2026. While the company saw a decline in its topline revenue compared to both the previous year and the immediate preceding quarter, net profitability increased. The Board finalized these results during a meeting held on October 19, 2026.

Financial Snapshot

Revenue from operations stood at Rs 74.39 crore for the quarter, down from Rs 81.96 crore in the same period last year and Rs 91.27 crore in the June 2026 quarter. However, the company successfully expanded its bottom line, reporting a net profit of Rs 2.25 crore, up from Rs 1.69 crore year-on-year. Basic Earnings Per Share (EPS) rose to Rs 0.76 compared to Rs 0.64 in the corresponding quarter of the previous year.

Legal Update: The Milk Cess Litigation

The company disclosed a significant ongoing litigation regarding Milk Cess liability owed to the Government of Haryana. A Special Leave Petition is currently pending before the Supreme Court challenging a previous Punjab & Haryana High Court ruling. The total demand against the company stands at Rs 544.31 crore, including interest. As a precautionary measure, the firm has made a provision of Rs 22.17 crore, with Rs 9.91 crore already deposited under court directives.

Risks to watch

The primary concern for investors is the massive discrepancy between the Rs 544.31 crore demand notice and the current provision of Rs 22.17 crore. Shareholders should monitor Supreme Court developments closely, as any adverse ruling could create substantial financial pressure on the company's balance sheet. Additionally, the continued contraction in revenue indicates ongoing challenges in operational scale.