Heritage Foods Limited, a leading dairy company, demonstrated resilience in the face of challenging market conditions, reporting a 9% year-on-year revenue growth to INR 11,125.00 crore for Q2 FY26. The company navigated through an extended monsoon, lean milk season, and butter shortage to deliver its second consecutive quarter above INR 11,000.00 crore in revenue.

Value-Added Products Drive Growth

The company's value-added products (VAP) portfolio emerged as a key growth driver, expanding by 18% to INR 4,132.00 crore and contributing 38% to total sales. Notably, categories such as curd, paneer, drinkables, and ice cream registered double-digit growth.

Financial Performance

Despite the challenging environment, Heritage Foods maintained profitability:

The EBITDA margin decline was primarily attributed to a 6.3% increase in milk procurement costs against a 4.5% rise in realizations.

Operational Highlights

• Milk procurement averaged 16.1 lakh liters per day, down 2% year-on-year
• Milk sales grew 1.1% to 12.1 lakh liters per day
• Distribution expanded by 60 points with 6,000 new retail outlets added

Subsidiary Performance

Heritage Nutrivet, a subsidiary, delivered strong results with revenue of INR 581.00 crore (34% increase) and PBT of INR 54.00 crore (80% increase).

Future Outlook

Management expects margins to normalize as milk costs ease and supply stabilizes in the flush season. The company continues to focus on expanding its value-added product portfolio and distribution network to drive growth.

Strategic Initiatives

Heritage Foods is implementing several strategies to improve performance:

1. Increased marketing spend, up by approximately 60% year-on-year
2. Launch of new products like Sampurna cow milk
3. Expansion of distribution network
4. Focus on automation and operational efficiencies
5. Investment in renewable energy to manage costs and reduce carbon footprint

As the company enters the festive and flush season, it anticipates improved milk availability, easing costs, and positive consumer sentiment. Heritage Foods remains committed to its Vision 2030 pillars of premiumization, digitalization, sustainability, and farmer-first governance.

The company's ability to navigate through challenging market conditions while maintaining growth in key segments demonstrates its resilience and strategic focus on long-term value creation.

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.