Heritage Foods Limited demonstrated resilience in its financial performance for the second quarter, overcoming multiple headwinds to post solid growth.

Revenue Growth and Operational Highlights

Heritage Foods reported a 9% year-on-year increase in consolidated revenue, reaching ₹11,125.00 million for Q2. This growth came despite challenges such as elevated milk procurement costs and extended monsoons, showcasing the company's operational agility and diversified portfolio strength.

Key operational metrics for the quarter include:

• Milk procurement volumes declined marginally by 2% to 16.10 million liters per day (MLPD)
• Milk sales volumes grew 1.1% year-on-year to 12.10 MLPD
• Average milk selling price increased 4.5% to ₹57.00 per liter

Value-Added Products Drive Growth

The company's focus on value-added products (VAP) continued to yield positive results:

• VAP revenue grew 14.8% year-on-year to ₹3,417.00 million
• VAP contribution to total revenue improved to 31.4%, up from 29.6% in the same quarter of the previous year
• Including consumer packs of ghee and butter, the expanded VAP portfolio contributed 37.9% to total revenue, up from 34.8% in the previous year

Profitability and Financial Performance

Despite cost pressures, Heritage Foods maintained its profitability:

• EBITDA stood at ₹772.00 million, with a margin of 6.9%
• Profit After Tax (PAT) increased by 5% year-on-year to ₹510.00 million

The company also received a GST refund of ₹93.60 million during the quarter, recognized as an extraordinary income.

Strategic Initiatives and Future Outlook

Heritage Foods continued to strengthen its market position through various initiatives:

• Launched the 'Purity ka Report Card' activation to reinforce milk purity credentials
• Introduced Sampurna Cow Milk under the 'Pure Goodness from Village' proposition
• Rolled out festive campaigns with high-impact sponsorships

Looking ahead, the company expects improving milk availability, festive and seasonal demand, GST-led tailwinds, and ongoing formalization in the dairy market to drive strong performance in the second half.

Mrs. Brahmani Nara, Executive Director of Heritage Foods, commented on the results: "We are pleased to report a 9% revenue growth in Q2, achieving a resilient topline of ₹11,125.00 million despite a challenging operating environment. With sustained consumer trust, expanding distribution, and a focused innovation agenda, Heritage Foods is well-positioned to capture emerging growth opportunities."

Heritage Foods remains committed to its founding principles of transparency, quality, and farmer empowerment as it continues to create long-term value for all stakeholders.

Heritage Foods Limited has announced its financial results for the second quarter, revealing a mixed performance with increased profit but lower EBITDA.

Profit Growth

The company reported a consolidated net profit of ₹511.00 million for Q2, up from ₹490.00 million in the same quarter last year, marking a 4.29% increase. This growth in profit comes despite challenging market conditions and increased operational costs.

EBITDA and Margin Compression

However, Heritage Foods experienced a decline in its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The EBITDA for Q2 stood at ₹771.00 million, down from ₹832.00 million in the corresponding quarter of the previous year, representing a 7.33% decrease.

The EBITDA margin also saw compression, dropping to 6.94% compared to 8.16% in the previous year's Q2. This margin contraction indicates increased pressure on the company's operational efficiency.

Revenue and Operational Highlights

While specific revenue figures for Q2 were not provided, the company's performance suggests a focus on maintaining profitability despite potential challenges in the operating environment.

Segment Performance

Heritage Foods operates primarily in the dairy segment, which continues to be the main contributor to its financial results. The company also has presence in renewable energy and feed segments, though their contributions are relatively smaller.

Management Commentary

N. Bhuvaneswari, Vice Chairperson and Managing Director of Heritage Foods, approved the financial results at the board meeting held on October 15. The management's focus appears to be on navigating the challenging market conditions while maintaining profitability.

Outlook

The mixed results indicate that Heritage Foods is managing to grow its bottom line despite pressures on operational metrics. The company's ability to increase profit in the face of EBITDA decline suggests effective cost management and potentially favorable product mix strategies.

Investors and analysts will likely be watching closely to see how Heritage Foods addresses the EBITDA decline and margin compression in the coming quarters, while maintaining its profit growth trajectory.

Note: All figures are in Indian Rupees (₹) and comparisons are made to the same quarter of the previous fiscal year unless otherwise stated.