Heritage Foods Q1 FY27 Results: Revenue Crosses ₹13,381 Million as Value-Added Products Reach Record 44% Contribution

What Happened ?

key details

Operational Highlights:

• Consolidated revenue reached a record ₹13,381 million, growing 18% YoY.
• Milk procurement volumes increased 2% YoY despite industry-wide supply shortages.
• Average milk procurement cost increased 7.2% YoY to ₹46.61 per litre.
• Average milk selling price increased 4% YoY to ₹58.68 per litre through calibrated pricing.
• Value-added products contributed a record 44% of total revenue.
• Paneer volumes grew 33% YoY.
• Curd volumes increased 26% YoY.
• Buttermilk volumes expanded 60% YoY.
• Lassi volumes nearly doubled with 98% YoY growth.
• Ice cream volumes increased 25% YoY.
• Ice cream business revenue crossed ₹550 million, growing 65% YoY.
• Alpenvie ice cream brand reported 44% YoY growth.
• Heritage Novandie Foods became a wholly owned subsidiary after acquiring the remaining 5.6% stake.
• Heritage increased its stake in Peanut Butter and Jelly Limited to 71%.
• Newly commissioned ice cream facility achieved nearly 40% capacity utilisation during its first quarter of operations.
• Heritage Nutrivet continued strong momentum with 37% YoY revenue growth.
• The company introduced premium Creamy Shakes and continued expanding its nutrition-focused product portfolio through Nourish+ High Protein Paneer. 

Note:

• While profitability declined because of significantly higher milk procurement costs, Heritage Foods continued prioritising procurement expansion, premiumisation, product innovation, and long-term market share gains over short-term margin protection. 

Risk Analysis

Summary:

• Heritage Foods’ Q1 FY27 performance reflects a strong demand environment but also highlights the impact of elevated raw milk prices on profitability. Although revenue and value-added products recorded robust growth, sustained input cost inflation could continue to pressure margins if procurement costs remain elevated. 

Key Risks:

• Continued industry-wide milk procurement inflation may compress gross and EBITDA margins.
• Raw milk supply shortages could affect procurement volumes if market conditions worsen.
• Pricing actions may become difficult if inflation persists and consumer affordability weakens.
• Premium category investments and expansion initiatives require sustained execution to deliver expected returns.
• Profitability recovery depends on normalization of milk procurement costs over the coming quarters. 

Worst Case:

• If milk inflation remains elevated for an extended period while consumer pricing flexibility reduces, Heritage Foods may continue to experience pressure on earnings despite healthy revenue growth.

Risk Level: Medium

Company Commentary

• Heritage Foods reported its highest-ever quarterly consolidated revenue of ₹13,381 million, demonstrating the strength of its integrated dairy model and consumer franchise.
• Management stated that value-added products contributed a record 44% of revenue, reflecting continued success of its premiumization strategy.
• The company deliberately prioritised procurement expansion, farmer engagement, and market share over short-term profitability during the period of elevated milk inflation.
• Heritage highlighted that calibrated price increases, stronger procurement volumes, and broad-based growth across value-added categories reinforce confidence in its long-term business model.
• Management believes acquisitions of Heritage Novandie Foods and the increased stake in Peanut Butter and Jelly Limited strengthen future premium growth platforms.
• The company remains committed to investments in procurement, innovation, premium products, distribution expansion, and farmer partnerships to support sustainable long-term growth as industry conditions normalize.