Heritage Foods Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Heritage Foods Ltd filed with BSE on 21 Jul 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Heritage Foods reported consolidated revenue up 18% year-on-year to INR13,381 million for Q1 FY27, with EBITDA of INR619 million at a 4.6% margin and PAT of INR150 million at a 1.9% margin. Value-added products revenue grew 40% year-on-year to INR5,636 million, reaching a record 44% share of consolidated revenue, while milk procurement prices rose 7% year-on-year to INR46.61 per liter. Management attributed gross margin decline to a mix shift toward cow milk, higher SMP consumption, and packing material cost increases.
Numbers mentioned
Consolidated revenue: INR13,381 million (Q1 FY27)
p. 3
“Consolidated revenue increased 18% year-on-year to INR13,381 million, marking another important milestone for Heritage.”
M. Sambasiva Rao, page 3 of the filed PDF · View the filing
EBITDA: INR619 million, 4.6% margin (Q1 FY27)
p. 3
“EBITDA stood at INR619 million with an EBITDA margin of 4.6%, while profit after tax stood at INR150 million, translating into PAT margin of 1.9%.”
M. Sambasiva Rao, page 3 of the filed PDF · View the filing
Milk procurement price: INR46.61 per liter (Q1 FY27)
p. 4
“milk procurement prices increased 7% year-on-year to INR46.61 per liter, reflecting continued supply tightness across key milk producing regions.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
Milk procurement volume: 18.10 lakh liters per day (Q1 FY27)
p. 4
“Heritage increased milk procurement volumes by 2% year-on-year to 18.10 lakh liters per day through its sustained investments in farmer engagement, vet services, cattle nutrition programs and timely payments.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
Average milk sale price: INR58.68 per liter (Q1 FY27)
p. 4
“average milk sale prices improved 4% year-on-year to INR58.68 per liter, reflecting the strength of the Heritage brand and sustained consumer trust.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
VAP revenue: INR5,636 million, 40% growth (Q1 FY27)
p. 4
“value-added products continue to be the primary growth engine during this quarter with VAP revenues growing 40% year-on-year to INR5,636 million.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
VAP contribution to revenue: 44% (Q1 FY27)
p. 4
“value-added products contributed a record 44% of consolidated revenues compared to 36% in the corresponding quarter last year.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
Broader VAP portfolio revenue: INR6,322 million, 39% growth, 49% of revenue (Q1 FY27)
p. 4
“the broader VAP portfolio grew 39% year-on-year to INR6,322 million, contributing a record 49% of consolidated revenues versus 41% a year ago.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
Ice cream business revenue: INR550 million, 65% growth (Q1 FY27)
p. 5
“It crossed INR550 million, growing 65% year-on-year with Alpenvie, our new brand, delivering robust growth of 44%.”
M. Sambasiva Rao, page 5 of the filed PDF · View the filing
Get-A-Way revenue growth: 196% (Q1 FY27)
p. 5
“Get-A-Way also delivered an encouraging performance with revenue growing 196% year-on-year, supported by improved product availability following capacity expansion while achieving a near breakeven bottom line.”
M. Sambasiva Rao, page 5 of the filed PDF · View the filing
Heritage Nutrivet revenue: INR728 million, 37% growth (Q1 FY27)
p. 5
“Heritage Nutrivet reported revenue of INR728 million, represent a robust growth of 37% year-on-year despite elevated input costs across the animal nutrition industry, while delivering a PBT of INR20 million.”
M. Sambasiva Rao, page 5 of the filed PDF · View the filing
Milk EBITDA margin: 3.03% (Q1 FY27)
p. 15
“Milk EBITDA margin for Q1 was 3.03% and . VAP EBITDA margin is 8.06%.”
A. Prabhakara Naidu, page 15 of the filed PDF · View the filing
Paneer revenue: INR52 crores (Q1 FY27)
p. 18
“this quarter, about INR52 crores of our revenue has come from paneer itself.”
Srideep Kesavan, page 18 of the filed PDF · View the filing
Operating cost as % of revenue: 9.01% (from 9.64%) (Q1 FY27 vs Q1 FY26)
p. 17
“if you see the operating cost, which is what is shown as the other expenses in the P&L as a percentage of revenue, Q1 of FY26, which is last year quarter 1, operating cost was 9.64% of revenue. Now it is 9.01% of revenue.”
Srideep Kesavan, page 17 of the filed PDF · View the filing
Employee benefits as % of revenue: 6.74% (from 7.21%) (Q1 FY27 vs Q1 FY26)
p. 17
“employee benefits used to be 7.21% of our revenue. It is down to 6.74 percentage of revenue.”
Srideep Kesavan, page 17 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Overall revenue growth — mid- to high teens (16-17%) · long term
stated as an aspiration by Srideep Kesavan
p. 10
“we are aiming to grow in the mid- to high teens, so 16 to 17 percentage kind of growth is what we are aiming to deliver, which requires milk to grow at about 7% to 8% and value-added products in the range of 25%.”
Srideep Kesavan, page 10 of the filed PDF · View the filing
VAP contribution to revenue — around 50% · FY30
stated as an aspiration by Srideep Kesavan
p. 15
“we would like to end at around 50% by FY30. Now that's a goal that we have.”
Srideep Kesavan, page 15 of the filed PDF · View the filing
EBITDA margin — high single digits
stated as an aspiration by Srideep Kesavan
p. 20
“our objective is not a 6% EBITDA. That's not what we are aiming for. We are looking at high single digits EBITDA.”
Srideep Kesavan, page 20 of the filed PDF · View the filing
Capex — about INR250 crores · FY27
stated firmly by Srideep Kesavan
p. 20
“All of it should add up to about INR250 crores for the year.”
Srideep Kesavan, page 20 of the filed PDF · View the filing
Farmer additions — another 5,000 farmers · Q2
stated firmly by Brahmani Nara
p. 16
“We've added close to 5,000 farmers in Q1, and our intention is to add another 5,000 farmers in Q2 itself.”
Brahmani Nara, page 16 of the filed PDF · View the filing
Pricing action
stated conditionally by J. Samba Murthy
p. 19
“if the procurement prices go up, the pricing action will be there. If procurement prices go down, the margin expansion will be seen.”
J. Samba Murthy, page 19 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Prices rose through the quarter and are now stable; company expects October flush but sees prices firm or slightly rising in Q2.
Answered by J. Samba Murthy
Asked by Sameer Gupta: Is the milk procurement outlook easing or firming heading into the flush season, given El Nino risk?
p. 7
“we have procured about 18.1 lakh liters during Q1 and the prices have gone up actually. So, if you take March to April to May to June, prices have gone up.”
J. Samba Murthy, page 7 of the filed PDF · View the filing
Procurement is managed via material balance planning in line with demand growth, and industry-wide milk shortages are affecting all players.
Answered by Srideep Kesavan
Asked by Sameer Gupta: Why has milk procurement been flat to negative for four quarters?
p. 8
“we do very measured material balancing planning. If you recall, last year was not very good as far as the volume growth was concerned.”
Srideep Kesavan, page 8 of the filed PDF · View the filing
About 5% came from price hikes and 35% from volume growth across categories.
Answered by Srideep Kesavan
Asked by Sameer Gupta: How much of the 40% VAP growth was price versus volume?
p. 8
“Yes, it is largely all volumes driven. Price hike, we have had price hike of about 5% in value-added products, weighted average.”
Srideep Kesavan, page 8 of the filed PDF · View the filing
About 80% of growth came from distribution expansion in existing geographies and 20% from consumer traction and market share gains.
Answered by Srideep Kesavan
Asked by Abhishek Mathur: What is driving the 35% volume growth in VAP - distribution or market share gains?
p. 10
“90% or 80% of the growth is primarily due to distribution expansion, new distribution points opened in existing geographies.”
Srideep Kesavan, page 10 of the filed PDF · View the filing
Mix shift toward cow milk (which rose more), higher SMP consumption and cost, and packing material cost increases drove the decline.
Answered by Srideep Kesavan
Asked by Pratik Kothari: Why did gross margin decline despite stable weighted-average procurement prices and higher VAP share?
p. 12
“the gross margins are impacted primarily because many of the regions are purely on cow milk. So those regions like cow milk has actually gone up by INR1, and that is seriously impacted, number one.”
Srideep Kesavan, page 12 of the filed PDF · View the filing
Ghee EBITDA improved to about -8.5% from -12% year-on-year, and losses in loss-making regions have reduced even as overall profitability declined.
Answered by Srideep Kesavan
Asked by Pratik Kothari: What is the status of breakeven for ghee and new geographies (Mumbai, North India)?
p. 12
“in ghee, last year same time, we had about -- we were negative about 12% in EBITDA. And now that EBITDA number is about minus 8.5%.”
Srideep Kesavan, page 12 of the filed PDF · View the filing
Milk EBITDA margin was 3.03% and VAP EBITDA margin was 8.06% in Q1.
Answered by A. Prabhakara Naidu
Asked by Kshitij Sowlani: What are the milk and VAP EBITDA margins separately?
p. 15
“Milk EBITDA margin for Q1 was 3.03% and . VAP EBITDA margin is 8.06%.”
A. Prabhakara Naidu, page 15 of the filed PDF · View the filing
Management said they are not targeting 6% but aiming for high single-digit EBITDA, driven mainly by lower raw milk prices over time.
Answered by Srideep Kesavan
Asked by Nishita Shanklesha: When will EBITDA margin return to 6-7% levels?
p. 20
“We are looking at high single digits EBITDA. In fact, our average or median EBITDA in the last several years has been 7% or higher, 7.5%, etcetera.”
Srideep Kesavan, page 20 of the filed PDF · View the filing
Management said the business is currently in a margin trough due to raw milk inflation, but the long-term trend of 3.5-4% annual milk price increase can be offset by VAP mix shift, and margins should expand when raw milk prices ease.
Answered by Srideep Kesavan
Asked by Viraj Mehta: Are normalized margins of 7-8% still achievable given the current cost pressures?
p. 22
“at this point in time, I should say that we are in the trough of it. When the raw milk procurement prices come down, you will see the margins expand very widely.”
Srideep Kesavan, page 22 of the filed PDF · View the filing
Risks flagged
Elevated milk procurement costs weighing on the dairy industry
p. 4
“Although elevated milk procurement costs continue to weigh on the dairy industry, resilient demand across our value-added products portfolio, calibrated pricing actions and disciplined execution enabled us to deliver another quarter of healthy growth while continuing to invest for the future.”
M. Sambasiva Rao, page 4 of the filed PDF · View the filing
Buffalo milk volume decline due to supply tightness
p. 12
“we saw in this quarter a heavy decline in buffalo milk volumes. We actually had over 20 percentage of decline -- degrowth in buffalo milk.”
Srideep Kesavan, page 12 of the filed PDF · View the filing
Packing material cost increases linked to the war
p. 12
“On account of the war, the packing material also had a significant material impact, almost 30 basis points of bottom line impact.”
Srideep Kesavan, page 12 of the filed PDF · View the filing
Unpredictable weather and monsoon impact on milk procurement
p. 16
“things are looking quite unpredictable as we've seen in Q1 itself and as we continue to see in Q2.”
Brahmani Nara, page 16 of the filed PDF · View the filing
Liquid milk volume growth stagnation affecting overhead absorption
p. 13
“If liquid milk volume growth comes back, it supports overhead absorption and the numbers would look very differently.”
Srideep Kesavan, page 13 of the filed PDF · View the filing
Cost inflation in cattle feed ingredients affecting Nutrivet margins
p. 21
“there is a very high increase in all the ingredients which are going to the cattle nutrition. And they are increasing month-on-month.”
Brij Mohan, page 21 of the filed PDF · View the filing
Reduced availability of raw material for cattle feed due to ethanol industry demand for corn
p. 21
“due to the cyclical weather condition and also you are aware of the ethanol industry impact on overall consumption of corn, rice milling also has slowed down.”
Brij Mohan, page 21 of the filed PDF · View the filing
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