Heritage Foods (HERITGFOOD) — Financial Results

Investor Takeaways

VAP contribution rose to 49% (from 41% YoY) with 39% revenue growth to INR6,322 million.

Ice cream revenue grew 65% YoY, contributing to overall revenue expansion.

Operating leverage improved to 9.01% of revenue, with VAP EBITDA (8.06%) exceeding milk EBITDA (3.03%).

Management targets VAP contribution of ~50% by FY30 and plans INR250 crores capex for FY27 to scale paneer and ghee capacity.

Overall Tone: Neutral

Key Financial Highlights

Metric	Value	YoY Change
Revenue	13,381	18%
Net Profit	150	1.9% margin
EBITDA	619	4.6% margin
EPS	Not available
OPM	Not available

What Changed

Heritage Foods Limited reported consolidated revenue of INR13,381 million in Q1 FY27, up 18% YoY, driven by value-added products (VAP) now contributing 49% of revenue (up from 41% YoY) with 39% growth to INR6,322 million. EBITDA stood at INR619 million (4.6% margin) and PAT at INR150 million (1.9% margin), supported by 65% YoY growth in ice cream revenue and expansion of milk procurement to 18.10 lakh liters/day (2% growth). Gross margins faced pressure from rising buffalo milk costs (up 7%) and packaging inflation, though operating leverage improved to 9.01% of revenue. Management targets VAP contribution of ~50% by FY30 and plans INR250 crores capex for FY27 to scale paneer and ghee capacity.

The filing reveals a strategic shift toward higher-margin value-added products to counter milk price inflation, with VAP growth driving both revenue expansion and margin improvement despite near-term cost pressures. Operating leverage improved as VAP EBITDA (8.06%) significantly exceeds milk EBITDA (3.03%), indicating scalable profitability from the new product mix. The 2% increase in milk procurement volume (to 18.10 lakh liters/day) aligns with capacity expansion plans, while the 30 bps packaging inflation and 7% buffalo milk cost increase represent near-term headwinds. The company’s focus on scaling paneer and ghee capacity via INR250 crores capex for FY27 underscores its commitment to capturing VAP growth opportunities, though gross margin pressure from input cost inflation requires close monitoring.

Peer Comparison

Company	P/E	ROE	ROCE	Market Cap (₹ Cr)
Heritage Foods Limited	16.09	Not available	Not available	3,066.44
Hindustan Unilever Limited	36.79	29.38%	27.39%	5,33,874.13
ITC Limited	11.06	50.02%	38.91%	3,87,724.39
Nestle India Limited	84.59	81.33%	93.64%	2,75,845.36

Heritage Foods trades at a significant discount to peers on P/E ratio (16.09 vs. 36.79–84.59), though its ROE and ROCE metrics are not provided for direct comparison. The company’s market cap of ₹3,066.44 Cr is substantially smaller than the peers, reflecting its niche positioning in the FMCG space.

Risks & Concerns

Rising buffalo milk costs (up 7% YoY) and packaging inflation (30 bps) are pressuring gross margins.

VAP contribution growth (39% YoY) must sustain to achieve the 50% target by FY30, requiring consistent execution of expansion plans.

Quarterly Trend

Quarter	Revenue (₹ Cr)	Net Profit (₹ Cr)	OPM%
Q3FY25	1,033.94	43.05	7.16
Q2FY25	1,019.52	48.63	8.16
Q1FY25	1,032.67	58.43	9.08
Q4FY24	950.57	40.5	7.22

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About Heritage Foods Limited (HERITGFOOD)

Fast Moving Consumer Goods · FMCG · Listed on NSE

Market Cap: ₹3,353.18 Cr P/E: 24.8 ROE: 12.2% ROCE: 14.1% Div Yield: 0.69%

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Source: Stock Announcements. Analysis by StockFin.ai. For informational purposes only — not investment advice.

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This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.

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