The winning streak for Milky Mist Dairy Food continued on D-Street on Wednesday. On its second day of trading, the dairy major’s stock hit another 10% upper circuit, taking its cumulative gains to 42.5% from its IPO price.

Milky Mist shares opened at Rs 190 on the BSE, compared with the previous close of Rs 181.45. Strong buying interest quickly pushed the stock to its daily upper price band and 52-week high of Rs 199.55, marking an intraday gain of 9.98%. The stock recorded a volume-weighted average price of Rs 196.48 and touched a low of Rs 189.85.

With Wednesday’s rally, the stock has now gained 42.5% from its IPO price of Rs 140. On its trading debut on Tuesday, August 18, the stock listed at Rs 165 on the NSE, delivering a listing premium of 17.86%.

The sustained momentum comes after Milky Mist’s blockbuster Rs 1,553 crore public issue. The IPO, which was open from August 11 to August 13, was subscribed 56.12 times overall. It comprised a fresh issue of 10.20 crore equity shares worth Rs 1,428 crore and an offer for sale of 89 lakh shares worth Rs 125 crore. The issue was priced in the range of Rs 133 to Rs 140 per share.

Should you buy, sell or hold Milky Mist shares?

According to Sunny Agrawal, Head of Fundamental Research at SBI Securities, the robust post-listing performance is well supported by Milky Mist’s solid foothold in value-added dairy products. The company holds a 19% market share in the private branded paneer market, a 12% share in cheese across South India, a 5% cheese market share pan-India, and a 13% share in the yoghurt category.

"The company also enjoys industry-leading EBITDA margins and return ratios. The company will repay debt of Rs 497 crore through IPO proceeds, thereby reducing interest outgo going forward. Moreover, an increase in penetration in the non-South market is likely to be one of the growth levers. We expect Milky Mist to trade at a significant premium to its peers," Agrawal said.

Echoing optimism on the operational strength, Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, pointed out that the company’s 33.6% revenue CAGR, expanding margins and nearly 32% return on equity (RoE) support its premium positioning. She noted that Temasek-backed Jongsong Investments invested Rs 482 crore in the pre-IPO round at Rs 139.76 per share for a roughly 5.2% stake, adding confidence to the valuation.

However, Nyati cautioned that at around 85 times FY26 earnings, valuations remain notably higher than the dairy sector average P/E of 52.5 times. While the stock's long-term business case is strong, she cautioned against chasing the rally at current levels. She advised existing investors to hold with a stop-loss at Rs 150 and look to accumulate more shares on meaningful dips.