Hoac Foods India Ltd — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

HOACFOODS reported robust H1 FY26 financial results with substantial growth in total income, EBITDA, and net profit, driven by strong sales momentum and operational efficiency. The company is undertaking significant manufacturing capacity expansion and broadening its distribution reach across both retail and B2B channels, targeting aggressive revenue growth for the next fiscal year. While export demand is growing, management acknowledges potential margin pressures from capex-related expenses and competitive market dynamics.

Highlights

  • Total income grew 96.87% YoY to INR 21.84 crores in H1 FY26, demonstrating strong top-line performance.

  • EBITDA increased 105.13% YoY to INR 3.31 crores, reflecting improved operational efficiency.

  • Net profit after tax nearly doubled, growing 94.35% YoY to INR 1.95 crores, and EPS improved 67.13% to 4.78.

  • A new mega manufacturing plant in Vidisha (50,000 sq ft) is expected to be operational in 2.5-3 months, significantly boosting production capacity.

  • The company is aggressively expanding its distribution network, targeting 5,000 kirana stores by next year and opening 7-8 new company-owned/franchisee stores annually.

Concerns

  • Management indicated that significant capex could lead to increased expenses, potentially keeping overall margins below 10% in the near term, impacting operating leverage.

  • An analyst questioned management on a prior guidance of INR 55 crores for the quarter, to which the response was evasive regarding the current quarter's performance against that specific target.

Key financials

  1. Total Income ₹21.84 Cr +96.9%YoY
  2. EBITDA ₹3.31 Cr +105.1%YoY
  3. Profit Before Tax ₹2.65 Cr
  4. Net Profit After Tax ₹1.95 Cr +94.3%YoY
  5. EPS ₹4.78 +67.1%YoY

What they filed

Q1 FY27: revenue up 29.8%, net profit up 40.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q1 FY26Q2 FY26Q4 FY26Q1 FY27
Revenue11 15 8 22 15 +33%20 +30%
EBITDA2 3 1 3 2 +50%3 +23%
Net profit1 1 1 2 2 +61%2 +41%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New mega manufacturing plant in Vidisha, MP (atta segment)
    So, overall, our capex recent current utilization, which is 80%-85%. Now, it is 15%. Simultaneously, the work of MP, Vidisha has started. So, the atta segment, which is giving a contribution of 45%-50% in revenue. We have started installing that segment there. So, in almost two and a half to three months, the factory setup will be complete.

Guidance & targets

Revenue

  • Next year's revenue growth Revenue · next year · Medium confidence 75%-80%
    if we talk about the growth rate, we expect 75%-80% growth next year.

    — Yashwant Thakur

  • Revenue potential of new Vidisha plant at 100% capacity utilization Revenue · Future (at 100% utilization) · Medium confidence Around 100 crores
    How much income it can generate? Around 100 crores

    — Yashwant Thakur

Distribution

  • New stores to open annually Distribution · every year · High confidence 7-8 new stores
    So our target is to open 7-8 new stores every year

    — Yashwant Thakur

  • Stores to open by March Distribution · by March · High confidence 3 to 4 stores
    19 stores and we are expanding it to March. We will do it in 3 to 4 stores.

    — Yashwant Thakur

  • Total kirana stores Distribution · next year · Medium confidence 5,000 stores

    From 1,400 stores today

    We are managing it systematically the number of 1,400 stores, we will take it to 5,000 stores... Not this year end. We are planning for next year if we get the number of 5,000 stores then our sales figure will be different it will come soon

    — Yashwant Thakur

Profitability

  • B2B EBITDA Margin Profitability · Ongoing · High confidence 8%-9%
    In B2B, if the number of stores increases, then it will be maintained at 8%-9% EBITDA.

    — Yashwant Thakur

What to watch in Q3 FY26

Vidisha Mega Plant Commissioning

in almost two and a half to three months (by Feb 2026)
Current Work started on 20,000 sq ft of 50,000 sq ft land.
Target Factory setup complete and operational.

Why it matters

This plant is expected to significantly boost production capacity and operational efficiency, directly impacting future revenue and margins.

Simultaneously, the work of MP, Vidisha has started... in almost two and a half to three months, the factory setup will be complete.

Risks & concerns

  • Margin pressure from capex-related expenses

    medium

    Management stated that with new capex, margins might not exceed 10% due to increased expenses, implying a potential trade-off between growth investment and immediate margin expansion.

    Management acknowledged

  • Impact of custom duties and taxation on export pricing

    low

    Management confirmed that custom duties and taxation are making products expensive for exports but believes consumer demand for quality will sustain sales.

    Analyst acknowledged

Q&A highlights

6 direct, 1 evasive
Capex Utilization and Future Growth Direct
So, overall, our capex recent current utilization, which is 80%-85%. Now, it is 15%. Simultaneously, the work of MP, Vidisha has started. So, the atta segment, which is giving a contribution of 45%-50% in revenue. We have started installing that segment there. So, in almost two and a half to three months, the factory setup will be complete.

Provides insight into current capacity constraints and the timeline for significant capacity expansion, which is crucial for future growth.

Asked by Akash Chaudhary

B2C/B2B/Export Revenue Mix Direct
revenue bifurcation, 54% comes from B2C and... in our own store we call it B2C, in our store it is 54%. B2B is around 37%. Rest, our export has also given us a revenue of 8.23%.

Clarifies the company's current revenue segmentation across different channels, which is key to understanding their business model and growth drivers.

Asked by Akash Chaudhary / Subhanu Bangal

Store Break-even Time Direct
It is around six to seven months and recently we opened 3-4 stores. So what we got now is three to four months.

Indicates improving efficiency and faster profitability for new retail outlets, suggesting strong unit economics for their expansion strategy.

Asked by Rajesh Joseph

Prior Revenue Guidance vs. Current Performance Evasive
Sir, almost. Whatever I have committed last there are no changes in that. I have given the numbers but for the next year I have not told you

Analyst challenged management on a previous guidance of INR 55 crores for the quarter, and the response did not directly address the discrepancy for the current quarter, raising questions about transparency or achievement of prior targets.

Asked by Brijesh

Export Growth and Pipeline Direct
In the last six months, we have shipped 10 containers. It is very difficult to establish a new export company and increase sales, but we are doing it, as it is coming to us. Recently, we secured a U.S. deal in which we received the first order worth one container, valued at around INR60-INR70 lakhs. There are 2-3 containers in the pipeline for the U.S., and overall, 5-6 containers are still in the pipeline.

Provides concrete details on the nascent but growing export business, including specific deal values and pipeline, indicating future revenue potential.

Asked by Noel Shah

Branding Strategy Direct
Sir, in branding strategy, our focus is that we believe more in offline branding and we believe more in directly connecting with the consumer. So through samples we are getting a good response and we will move forward with that. Because if we focus on online in today's date then capital will be utilized a lot.

Explains the company's strategic choice to prioritize offline, direct-to-consumer branding over heavy online advertising, which impacts marketing spend and customer acquisition strategy.

Asked by Noel Shah

Operating Leverage and Margin Impact of Capex Partial
No, no, no. If we get capex there, then the margin will not be more than 10%. Because the expenses are more.

Highlights a potential near-term trade-off where significant capex, while enabling growth, might temper margin expansion due to increased operational expenses.

Asked by Akash Chaudhary

US Export Tariffs Impact Direct
Sir, there is no effect because the consumer is smart. If there is a demand from the consumer then they know that it will be expensive And our custom duties and taxation are becoming expensive

Addresses a potential external risk (tariffs) on export business, with management acknowledging higher costs but asserting continued demand due to product quality.

Asked by Subhanu Bangal

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance

HOACFOODS delivered robust financial results for H1 FY26, with total income surging by 96.87% year-over-year to INR 21.84 crores, up from INR 11.09 crores in H1 FY25. This strong top-line growth translated into significant profitability improvements, as EBITDA increased by 105.13% to INR 3.31 crores and net profit after tax nearly doubled, growing 94.35% to INR 1.95 crores. The Earnings Per Share (EPS) also saw a substantial rise of 67.13%, reaching 4.78 in H1 FY26 compared to 2.86 in the prior year period.

Manufacturing Capacity Expansion

The company is actively expanding its manufacturing capabilities to support future growth. Current capex utilization stands at 80-85% for existing plants. A new mega manufacturing plant is under development in Vidisha, MP, on a 50,000 sq ft land parcel, with work already commenced on 20,000 sq ft. This facility, primarily for the atta segment, is expected to be fully operational within the next two and a half to three months and has a revenue potential of approximately INR 100 crores at 100% capacity utilization.

Distribution and Retail Strategy

HOACFOODS operates through a multi-channel strategy, including company-owned and franchisee outlets, B2B sales to other retailers, and exports. The company currently has 19 operational outlets (7 company-owned, 12 franchisee) and plans to open an additional 3-4 stores by March, targeting 7-8 new stores annually. In the B2B segment, the company aims to expand its reach from 1,400 outlets to 5,000 kirana stores by next year.

Revenue Mix and Margins

The company's H1 FY26 revenue mix shows B2C (own stores) contributing 54%, B2B (other retail outlets) contributing 37%, and exports accounting for 8.23% of total revenue. While B2C operations yield a 10% EBITDA margin, B2B margins are maintained at 8-9% due to higher initial margins offered to distributors to capture market share. Management noted that significant capex could lead to increased expenses, potentially keeping overall margins below 10% in the near term.

Export Business Development

HOACFOODS has established an export subsidiary, HOAC Exports Private Limited, and has shipped 10 containers to the UK in the last six months. A significant deal has been secured with the USA, with the first container valued at INR 60-70 lakhs expected to be shipped by the end of November 2025. The company has 2-3 more containers in the pipeline for the US and 5-6 overall, indicating growing international demand for its spices and healthy flour products, despite higher custom duties and taxation.

Online Presence and Branding

The company has initiated sales on quick commerce platforms like Blinkit in the Haryana region, starting with M.P. Sharbati atta and planning to onboard more products. While online sales currently contribute a small 5-6% to revenue, the company is focusing its branding strategy on offline engagement and direct consumer connection through samples, believing this approach is more capital-efficient than extensive online advertising. The retention rate for its consumer base is reported at 85%, with a repetition rate of 65%.

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