Heritage Foods Limited: A Leading Player in the Indian Dairy Industry

Heritage Foods Limited, headquartered in Hyderabad, India, is a significant force in the Indian dairy market. With operations spanning across 16 states, the company offers a diverse range of products including milk, ghee, curd, and various value-added dairy products.

Financial Indicators

In the financial year 2023, Heritage Foods achieved a revenue of approximately INR 2,500 crore. The company showcased financial stability by effectively managing rising operational costs, highlighting its strategic cost management capabilities. Heritage Foods had a market capitalisation of around ₹3,334 crore and a share price of ₹373.95. Its PE ratio was 24.78, while return on equity stood at 13.61% and debt-to-equity at 0.33.

Important Company Events

Heritage Foods has played a crucial role in stabilizing consumer prices amidst economic challenges. This involved launching new product lines and expanding its distribution network to enhance market presence and consumer engagement. Despite initial sales impacts due to early monsoons, the company observed improved milk productivity.

Leadership and Strategic Plans

Under the leadership of industry figures such as Mrs. Bhuvaneswari Nara and Nara Brahmani, Heritage Foods is making transformative impacts on consumer affordability and farming stability. The company announced significant price reductions across its dairy product range, including UHT milk, ghee, butter, cheese, paneer, and ice cream, passing on the benefits of the GST Council's rate rationalisation to consumers.

Looking forward, Heritage Foods aims to strengthen its market position through strategic partnerships and investments in technology to boost productivity. Plans include increasing the number of processing plants and diversifying the product range to attract a broader consumer base. A strong emphasis is placed on sustainability practices, particularly in energy efficiency and waste management.

With an ambitious investment plan of ₹4,000 crore, Heritage Foods intends to double its milk procurement capacity to 40 lakh liters per day, focusing on digital transformation and farmer empowerment. Despite challenges such as rising milk procurement costs and supply shortages, the company is investing in operational resilience and growth strategies. It is focused on strengthening procurement networks, expanding dairy offerings, and optimizing supply chains to navigate these difficulties effectively.

Srideep Kesavan, CEO of Heritage Foods, noted that the revenue contribution from packaged dairy drinks has doubled over the past three years. The company is also introducing protein-dense lines, aligning with the domestic protein supplement market expected to reach nearly $1.6 billion by 2034.

Recent Financial Performance

Heritage Foods’ consolidated revenue reached ₹1,320 crore in the second quarter of FY2027, up 19% from a year earlier. Its core dairy business expanded by nearly 17%, while total sales volumes rose 7% year on year. Operating performance improved from the preceding quarter. EBITDA was ₹74 crore, 20% higher than in Q1, and the margin widened to 5.6% from 4.6%, an increase of 98 basis points. Compared with the same period a year earlier, however, EBITDA was down 4% and profit after tax declined 39%.

The company said closer engagement with farmers and measured price increases supported sales across its main product groups. Heritage Foods linked the difficult cost environment to imbalances between demand and supply, weak farm productivity, weather-related disruption, and higher expenditure on feed and fodder. The company also reported that employee and operating costs as a share of revenue improved during the quarter. Value-added products grew 32% from a year earlier and accounted for 42.5% of quarterly revenue, compared with 37.9% in Q2 FY26. Their share reached 45.7% for the first half of FY27, up from 39.3% in the corresponding period a year earlier. Including consumer packs of ghee and butter, the value-added portfolio increased by 31%.

Product Innovations and Market Expansion

Volume growth was recorded across several categories. Curd sales increased 27%, paneer 38%, buttermilk 67%, lassi 91%, and ice cream 81%. A greenfield plant commissioned in the previous year supported the ice-cream business. Daily curd sales exceeded 500 tonnes, with the product marketed around natural ingredients, taste, and the absence of artificial additives. The company expanded its Nourish+ High Protein range during the quarter by launching a curd product containing 25 grams of protein per pack. The platform accounted for more than 15% of paneer sales, while the Livo and Greek Yogurt range surpassed 100 tonnes in sales. In Hyderabad, the Quality Ka Report Card programme lets consumers access milk-quality information through a QR code printed on each pack. Heritage Foods said its priorities for Q3 FY27 include further development of value-added categories, revenue growth, and improved profitability amid elevated milk costs.