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    HOACFOODS

    HOACFOODS
    Fast Moving Consumer Goods·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

    5

    • 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

    2

    • 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

    Single quarter

    05 metrics
    1. 01Total Income₹21.84 Cr+96.9%YoY
    2. 02EBITDA₹3.31 Cr+105.1%YoY
    3. 03Profit Before Tax₹2.65 Cr
    4. 04Net Profit After Tax₹1.95 Cr+94.3%YoY
    5. 05EPS₹4.78+67.1%YoY

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    Next year's revenue growth
    75%-80%
    		Medium
    Revenue
    Revenue potential of new Vidisha plant at 100% capacity utilization
    Around 100 crores
    		Medium
    Distribution
    New stores to open annually
    7-8 new stores
    		High
    Distribution
    Stores to open by March
    3 to 4 stores
    		High
    Distribution
    Total kirana stores
    5,000 stores
    		Medium
    Profitability
    B2B EBITDA Margin
    8%-9%
    		High

    Vidisha Mega Plant Commissioning

    in almost two and a half to three months (by Feb 2026)
    CurrentWork started on 20,000 sq ft of 50,000 sq ft land.
    TargetFactory 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.

    How to verify

    capital_allocation.capex.purposes

    Risks & concerns

    2
    RiskSeverity

    Margin pressure from capex-related expenses

    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

    medium

    Impact of custom duties and taxation on export pricing

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

    low

    Q&A highlights

    8

    “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

    2 min read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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%.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.