Value chain analysis facilitates us to comprehend markets, networks, relationships between various intermediaries, the roles of various actors, and the significant constraints that limit the expansion of the value chain and consequently, the efficiency of its actors. Understanding how milk and milk products are used by the consuming households is crucial in recognising the emerging opportunity in dairy farming and unlocking the processing sector's untapped potential. So, a comprehensive estimate of the formal sector's value chain and its associated costs for the cooperative and private dairy plant during the study period 2020-21 are presented in this paper. The cost of milk procurement for the private dairy plant was found to be higher (1.40/litre) than for the cooperative dairy plant (1.37/litre), due to handling a smaller volume of milk. The cost of raw materials was a significant portion of the overall cost incurred by the cooperative milk plant and the private plant, accounting for 88.03 and 88.85 percent, respectively. In the cases of cooperative dairy plants and private dairy plants, the selling price per litre of standardized milk was discovered to be ₹44 and ₹43 respectively. According to the analysis, the cooperative (11.57/litre) dairy plant realised a higher marketing margin than the private dairy plant (₹10.60/litre). Because private milk plants (₹1.84) have lower marketing costs and margins than cooperative milk plants (₹2.02), they were found to have higher marketing efficiency for standardised milk. Lack of access to green fodder in the study area was the main issue for milk producers. Lack of adequate infrastructure, seasonality in milk procurement, and price fluctuations are problems at collection centres. Problems at the processing plant include the high cost of milk processing and transportation.