Heritage Foods Q2 Profit Drops 39% on Elevated Milk Costs Despite 19% Revenue Growth
Heritage Foods Limited (NSE:HERITGFOOD) reported a 19% year-on-year increase in consolidated revenue to Rs 1,319.6 crore for the second quarter of FY27, driven by growth in milk sales and value-added items. However, profit after tax declined 39% to Rs 30.9 crore due to higher raw milk procurement expenses. For the first half of FY27, consolidated revenue reached Rs 2,657.7 crore, up 18%, while profit dropped 39% to Rs 55.8 crore.
The earnings pressure stems from an 11% surge in average milk procurement prices, which reached Rs 47.73 per litre due to strong demand and higher feed costs. Procurement volumes rose 7% to 17.28 lakh litres per day, while milk sales volumes grew 2.5% to 12.35 lakh litres per day with average selling prices rising 6% to Rs 60.34 per litre. Revenue from value-added products grew 32% to Rs 451 crore, lifting their share of revenue excluding ghee and butter to 35.4%, propelled by gains in lassi and ice cream sales.
Looking ahead, key operational factors include whether the company can maintain its EBITDA margin recovery, which increased 98 basis points sequentially to 5.6%. Executive Director Brahmani Nara indicated the company will focus on strengthening its procurement network, expanding capacity for value-added products, and introducing new premium and nutrition-focused items.
Key points
- Q2 FY27 consolidated revenue rose 19% year-on-year to Rs 1,319.6 crore, while net profit fell 39% to Rs 30.9 crore.
- Average milk procurement prices climbed 11% year-on-year to Rs 47.73 per litre due to elevated feed costs and sustained demand.
- Revenue from value-added products grew 32% year-on-year to Rs 451 crore, accounting for 35.4% of revenue excluding ghee and butter.
- EBITDA margin recovered by 98 basis points sequentially to reach 5.6% in the second quarter.
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Why did Heritage Foods profit fall in Q2 FY27?
Heritage Foods profit fell 39% to Rs 30.9 crore in Q2 FY27 primarily due to an 11% increase in raw milk procurement costs, driven by higher feed expenses and sustained market demand.
How much did Heritage Foods revenue grow in Q2 FY27?
Heritage Foods consolidated revenue increased 19% year-on-year to Rs 1,319.6 crore in Q2 FY27, supported by growth in milk sales volume and a 32% rise in value-added product revenue.
What was the growth in Heritage Foods value-added products segment?
Revenue from value-added products excluding ghee and butter rose 32% year-on-year to Rs 451 crore, representing 35.4% of revenue excluding ghee and butter, led by strong growth in lassi and ice cream sales.