Milkfood sells Moradabad dairy plant for Rs 130 crore, pares debt in balance-sheet reset

Milkfood sells Moradabad dairy plant for Rs 130 crore, pares debt in balance-sheet reset

• Milkfood Ltd sold Moradabad plant for Rs 130 crore, netting Rs 116.11 crore cash
• Proceeds to repay Rs 75 crore debt, reducing annual finance costs by Rs 9.25 crore
• Company plans new investments in ice-cream, cheese, and butter manufacturing

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Milkfood Ltd., one of India’s listed dairy companies, has monetised a key real estate asset in Uttar Pradesh by selling its Moradabad manufacturing unit for Rs 130 crore.

The company informed stock exchanges that it has signed an ‘agreement to sell’ its dairy plant located at Agwanpur in Moradabad, marking a decisive step in its ongoing business reorganisation and deleveraging strategy. The transaction has resulted in a net cash inflow of Rs 116.11 crore after taxes, the company said.

The sale has generated a net profit of Rs 78.04 crore on land, underscoring the value of industrial real estate assets in the region. Milkfood reported no loss on the sale of plant and machinery and recorded a profit of Rs 7.54 crore on buildings. A reversal of Rs 37.37 crore from revaluation reserves was disclosed as a non-cash accounting adjustment, the company said.

The company said that a significant portion of the proceeds would be used to repay debt. Milkfood plans to repay loans worth Rs 75 crore, a move expected to reduce annual finance costs by around Rs 9.25 crore.

The company will also benefit from savings of nearly Rs 8.5 crore a year in plant-related overheads, taking the combined annual benefit to about Rs 17.75 crore, the firm said.

These measures are expected to lead to an earnings accretion of approximately Rs 7.25 per share (face value Rs 5), reflecting the immediate financial upside of the asset sale, the company said.

“This transaction reflects a disciplined approach to capital allocation. By monetising a non-core asset, we are meaningfully reducing debt, improving cash flows and creating financial headroom to pursue growth opportunities,” said Sudhir Avasthi, Managing Director, Milkfood Ltd.

The company plans to invest in new capacities, including ice-cream manufacturing, while also evaluating expansion opportunities in cheese and butter segments, which continue to see strong demand in urban and semi-urban markets, the firm said.

Operationally, Milkfood intends to scale up production at its Patiala facility. The company estimates that turnover could reach Rs 750 crore by FY27, with EBITDA margins of around 7 percent.

Industry watchers see the Moradabad asset sale as part of a wider trend of companies unlocking value from industrial land and manufacturing real estate to strengthen balance sheets and fund growth.