Heritage Foods Limited — PPTs, 17-05-2025: Investor Presentation

1. Financial Highlights:

Heritage Foods reported record revenue of ₹4,134.6 Cr in FY25, up 9% YoY, with core revenue growth exceeding 10% per quarter excluding bulk B2B sales. Net profit jumped 77% YoY to ₹188.3 Cr, supported by a 2.3% rise in Value-Added Products (VAP) revenues, now 32.5% of total revenue. Milk procurement rose 11% to 1.76 million liters per day (MLPD), while milk sales increased 4.5% to 1.16 MLPD. Average selling price edged up to ₹55.6/litre. EBITDA margin expanded to 8.0% from 5.5%, reflecting operating leverage and better input costs. The balance sheet shows equity of ₹972 Cr, manageable debt-to-equity of 0.18x, and total assets at ₹1,558.3 Cr with a strong ROCE of 23.1%.

2. Strategic Initiatives & Growth Drivers:

Focus is on expanding the VAP segment, currently 40.6% of revenue including ghee and butter, leveraging urbanization and organised retail growth. Capex is underway for an ice cream manufacturing facility to enhance frozen dessert offerings. Digital tools like a live customer app and distributor management system are boosting sales efficiency and supply chain traceability. Better working capital management has lowered receivables, aiding margin improvement.

3. Business Developments:

Heritage plans to acquire a majority stake in Heritage Novandie Foods Pvt Ltd for ₹8.5 Cr to gain operational control and implement a lean contract manufacturing model, optimizing input supply and manpower. New product launches and targeted marketing campaigns are expanding penetration, especially in southern metropolitan markets.

4. Market Position & Competitive Advantage:

With a federated supply chain serving ~300,000 farmers across 9 states, Heritage ensures freshness via proximity-based procurement, chilling, and distribution. It reaches 10 million consumers daily through 18 plants and 7,300+ distributors, covering 75% of pin codes in 17 states. Strong brand recall in southern metros and industry-leading margins underscore scale and operational efficiency. A diversified portfolio across milk, VAP, and fats supports resilience to seasonal demand shifts.

5. Investor Implications:

The shift towards higher-margin VAP combined with volume growth and operational leverage offers positive growth potential. Digital initiatives and increased JV control reduce execution risk. Investors should watch integration of new manufacturing capacity and JV consolidation to gauge margin sustainability and expansion.