Milky Mist Dairy Food Shares Fall 4% Following Surge After Market Debut

Milky Mist Dairy Food’s shares experienced mild profit-booking pressure on Thursday, following a remarkable 42% surge over the preceding two trading sessions post its stock market debut. Initially, the stock slipped to an intraday low of Rs 191.25, a decline of 4.21%, before stabilizing around Rs 200 on the NSE. The volatility appears to be a natural reaction following a strong opening, as the stock had debuted on August 18 at Rs 165 per share—a notable 18% premium over its IPO price of Rs 140. The company’s IPO was exceptionally well-received, demonstrating demand through an impressive subscription rate of 56.12 times, which highlights robust investor interest in Milky Mist’s business model.

The aggregate market capitalization of Milky Mist now stands at approximately Rs 15,369 crore, bolstered by a business model showing promising financial fundamentals. Analysts point out that the company’s compelling revenue compounded annual growth rate (CAGR) of 33.6%, along with a strong return on equity (RoE) at 32%, contributes to its favorable outlook. Additionally, the pre-IPO investment of Rs 482 crore by Temasek-backed Jongsong Investments solidified confidence in the company’s market positioning, further validating its IPO valuation.

Despite these positives, analysts urge caution due to the stock’s hefty valuation. Trading at about 85 times FY26 earnings presents a significant premium over the dairy sector average P/E of approximately 52.5 times. Such a valuation suggests that, while Milky Mist’s margins and product mix are exceptional, the stock may be poised for profit-booking in the short term after its impressive debut performance. Investors are advised to hold their positions while maintaining a stop-loss at Rs 150, adopting a strategy of adding to their holdings during meaningful price dips rather than pursuing aggressive buying at current valuations.

Overall, Milky Mist’s impressive financial performance, characterized by a 175.7% year-on-year net profit increase to Rs 127 crore for the fiscal year ending March 2026, positions it as a noteworthy contender in the new-age dairy sector. However, as the market digests the initial post-listing gains, the concern arises whether the current valuation adequately reflects the company’s long-term growth potential while leaving room for further upside in the stock.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)