Modern Dairies Faces Financial Challenges Amidst Declining Sales and Market Underperformance

Modern Dairies, a microcap player in the FMCG sector, has recently experienced an adjustment in evaluation, reflecting ongoing trends in its financial performance. The company reported flat financial results for the quarter ending September 2025, with a net profit after tax (PAT) of Rs 3.34 crore, which has shown a decline over the last six months.
Over the past five years, Modern Dairies has faced challenges, evidenced by a compound annual growth rate (CAGR) of -14.86% in net sales, indicating a struggle to maintain revenue growth. The company's return on capital employed (ROCE) stands at an average of 7.41%, suggesting limited profitability relative to the total capital utilized.

In terms of market performance, Modern Dairies has underperformed significantly compared to the broader market, with a return of -38.72% over the past year, while the BSE500 index has yielded a return of 4.43%. Despite these challenges, the company has seen a rise in profits by 28.4% over the same period, with a price-to-earnings growth (PEG) ratio of 0.3, indicating a potential valuation consideration.

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