Heritage Foods shows resilience in Q2 despite challenging quarter

Heritage Foods Limited announced its Q2 FY'26 earnings, reporting consolidated revenue of INR11,125 million, an increase of 9% year-on-year, marking the second consecutive quarter with revenue above INR11 billion. Value-added products were a significant driver, contributing nearly 38% of total sales with revenues of INR4,132 million, up 18% year-on-year, with categories like curd, paneer, drinkables, and ice cream all registering double-digit growth. EBITDA stood at INR772 million with a 6.9% margin, and PAT was INR510 million, up 5% year-on-year.

EBITDA margins were 122 basis points lower year-on-year, primarily due to a 6.3% increase in milk procurement costs versus a 4.5% rise in realizations, with the mismatch attributed to delayed pass-through during the lean season; however, margins improved by 44 basis points sequentially, indicating normalization. Operational efficiency improvements include an increase in milk collected per kilometer and a 10% rise in liters produced per person across factories.

The company's subsidiary, Heritage Nutrivet Limited, also delivered a strong performance with revenue of INR581 million, a 34% increase year-on-year, and PBT of INR54 million, an 80% increase year-on-year. Heritage Foods expects margins to normalize as milk costs ease and premium categories gain traction, supported by continued distribution network expansion and the commissioning of its greenfield ice cream facility by the end of the financial year.