Heritage Foods

Heritage Foods reported a robust Q3 FY25, with consolidated revenue from operations growing 10% year-on-year to ₹1,033.9 crores. Profitability saw significant improvement, with EBITDA increasing 43% to ₹74.1 crores, expanding margins to 7.2% from 5.5% in Q3 FY24. Profit After Tax (PAT) surged 60% to ₹43.1 crores, with PAT margins reaching 4.2% from 2.9% in the prior year.

Value-added products continue to be a key growth driver, with revenue increasing 17.6% year-on-year to ₹287.4 crores and volumes up 14.3%. Within VAP, paneer and cheese categories showed exceptional growth of 50-70%, while curd sales grew 12.37% year-on-year. Dairy milk sales also saw a healthy 6.08% year-on-year increase, reaching 1,169,000 litres per day, driven purely by volumes as prices have been stable for 18 months.

Milk procurement increased to 18.38 lakh litres, up from 16.32 lakh litres last year. The average milk procurement price was ₹41.91 per litre, 2.7% lower than last year, while the average selling price remained flat at ₹54.64 per litre. Management anticipates milk procurement prices to firm up by ₹1.5 to ₹2 per litre over the next several months, translating to a 4-5% annual inflationary impact, and is considering retail price increases to absorb these costs.

The company is actively expanding its distribution network, adding 242 new customers and 35-40 Heritage Happiness Points during the quarter, bringing the total to 352 Happiness Points. Marketing and sales promotion expenses increased to 0.95% of revenue, aligning with the strategy to spend around 1% of revenue on marketing to drive consumer acquisition and sustain growth. Quick commerce channels now contribute 6.5-7% of total revenues and are growing rapidly.

The ice cream business generated ₹15.94 crores in Q3 FY25, and Heritage Foods is nearing full capacity, expecting to reach ₹110 crores in revenue this year. A new state-of-the-art factory, operational by November 2025, is planned to support a 20% year-on-year revenue growth target for the ice cream segment. This expansion will facilitate new product innovation, entry into e-commerce/quick commerce for ice cream, and penetration into adjacent geographies like Maharashtra, with retail footprint expected to grow 15-20%.

Heritage Nutrivet Limited, the wholly-owned subsidiary, also contributed significantly to overall success. It reported a 15% increase in revenue, reaching ₹50.9 crores, and a substantial 172% rise in Profit Before Tax (PBT) to ₹5.6 crores. This improvement was attributed equally to favorable raw material prices and enhanced operational efficiencies, showcasing strong performance in the cattle feed division.

In the last six months, Heritage Foods has entered Eastern markets such as West Bengal and Bihar, and through e-commerce, its products are available across most of India. The primary focus remains on 'deepening roots' and accelerating growth in existing core markets (Southern states, Maharashtra, NCR, Haryana) rather than just broad expansion. Exports to the US, Singapore, and the Middle East are also growing at high double-digit rates (50-60%), though from a small base, contributing negligibly to overall revenue currently.