Keeping aside 1 cup milk, heat the remaining in a deep non stick pan, stirring and scraping the milk sticking to the sides of the pan into the milk, till milk reduces slightly.
Mix milk powder and coconut milk powder with the reserved milk till no lumps remain. Add this slowly to the milk in the pan and mix well. Simmer for a few minutes.
Add sugar and mix and continue to simmer till it reduces further.Chop coconut malai roughly and put them in kulfi moulds.
When the milk mixture thickens sufficiently, switch off the heat and set aside to cool slightly.
Pour into the kulfi moulds and close them with the lids. Place the moulds in their stand and when cooled down to room temperature place in the freezer to set completely.
Once set demould and serve immediately.