Dairy industry to witness 13-14% revenue growth this year on strong demand

India's dairy industry is expected to witness healthy revenue growth of 13-14 per cent this financial year, as strong consumer demand continues along with improved supply of raw milk, a report said on Wednesday.

While demand will be supported by rising consumption of value added products (VAP), ample milk supply will be driven by good monsoon prospects, Crisil Ratings said in a report.

Rise in raw milk supply will also lead to higher working capital requirements for dairy players, the report noted.

Though continued capital expenditure (capex) by organised dairies over the next two fiscals will result in debt levels inching up, the credit profiles will be stable supported by strong balance sheets.

"Amidst modest growth of 2-4 per cent in realisation, the dairy industry's revenues are seen rising on healthy 9-11 per cent growth in volumes. VAP segment - 40 per cent contributor to the industry revenues - will be the primary driver, fueled by rising income levels and consumer transitio