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Revenue
₹1,119 Cr
verified against source
Revenue YoY
8%
reported change
EBITDA
₹62.9 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Heritage Foods reported a resilient Q3 FY26 with consolidated revenue of ₹1,119 crore, up 8% YoY, driven by steady demand and value-added product (VAP) growth. However, EBITDA margin compressed to 5.6% (down ~180bps YoY) due to a sharp 9% YoY increase in milk procurement prices, outpacing price realizations. Milk procurement volumes declined 9% YoY to 16.73 lakh liters/day, the first drop in years, as excess rainfall hurt animal productivity. VAP revenues grew 22.6% YoY, contributing 38% of total revenue (vs 33.9% last year). Management expects margins to normalize as supply conditions improve and summer demand boosts higher-margin products like curd and ice cream. The Hyderabad ice cream plant is on track for commercial commissioning in Q4. Key risk: procurement prices may harden further in the near term, delaying margin recovery.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated a targeted EBITDA margin range of 7-9%, expecting margins to normalize from current lows as supply conditions improve and operating leverage kicks in.
- The Hyderabad ice cream plant is expected to commence commercial production by end of February or early March 2026, with first-year capacity utilization of 40-45%.
- The flavored milk plant is also expected to be commissioned in the current quarter (Q4 FY26), positioning the company to capture incremental demand.
- Management targets value-added product volume growth of 20-22% in Q4, driven by summer seasonal products and strong performance in paneer and ice cream.
Risks flagged
- Management expects procurement prices to increase in the next 30-45 days before easing with the mini flush in May, potentially delaying margin recovery.
- An analyst questioned whether Heritage's price hikes (4.9% on milk, 6.6% on VAP) could lead to market share loss if competitors hold prices. Management acknowledged some peers have not raised prices but expects industry-wide increases.
- Other expenses have been growing at ~20% YoY for several quarters, outpacing revenue growth, driven by logistics and marketing costs. Management cites operating leverage as the remedy but volume growth remains elusive.
- Excess rainfall and hormonal issues in crossbreed cattle have reduced milk yields. Management noted that climate impact is palpable and may continue to affect supply.
Key quotes
- We are expecting the mini flush season or the cow flush season in the south India which starts from May onwards. We expect that at least to normalize because the prices in south of India is very firm at this point in time.
- The impact of climate is palpable in our industry and you will read upon a lot of reports in this regard in the media.
- We are very sharply focused on our core markets. The size of dairy industry is huge. Even in the markets where we operate the headroom for growth is tremendous.
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