Heritage Foods decline in Q2 profit on higher milk costs
Heritage Foods reported a 5% year-on-year rise in consolidated net profit to ₹50.99 crore for Q2 FY25, supported by steady revenue growth but constrained by higher input costs. Total income grew to ₹1,112.5 crore, up from ₹1,019.5 crore in the same quarter last year, while total expenses increased nearly 11% to ₹1,059.2 crore, narrowing operating margins.
Milk procurement volumes declined by 2.1% to 16.1 lakh litres per day, while average procurement cost rose 6.3% to ₹42.8/litre. In contrast, milk sales volumes edged up 1.1% to 12.1 lakh litres per day, with average selling price improving by 4.5% to ₹57/litre.
The company’s value-added products (VAP) segment remained the key growth driver, clocking ₹341.7 crore in revenue, up 14.8% year-on-year, and contributing 31.4% of non-fat revenues. Subsidiary Heritage Nutrivet also reported strong performance, with 34% higher revenue and 80% jump in profit before tax.
Key Financials at a Glance — Q2 FY25 (YoY Comparison)
| Company | Revenue (₹ crore) | YoY Growth | Net Profit (₹ crore) | YoY Change | EBITDA Margin (%) | Key Notes |
|---|---|---|---|---|---|---|
| Heritage Foods | 1,112.5 | +9.1% | 50.99 | +5.0% | ~6.1% ↓ | Input cost rise; strong VAP growth (14.8%) |
| Dodla Dairy | 810.4 | +13.4% | 61.2 | +18.3% | ~9.3% ↓ | Robust recovery in value-added & cattle feed units |
| Hatsun Agro | 2,030.6 | +11.2% | 74.9 | +6.8% | ~6.8% ↓ | Cost inflation pressures offset by product mix |
| Parag Milk Foods | 850.3 | +8.5% | 45.1 | +3.9% | ~7.5% ↑ | Cheese & ghee portfolio driving profitability |
(Data: Company filings, exchange disclosures, Moneycontrol / CNBC / BSE updates, Oct 2025)
On a standalone basis, net sales increased 8.3% YoY to ₹1,090.4 crore, though EBITDA declined by 11.2% due to input cost escalation.
Industry Insight:
The Q2 performance reflects the broader dairy sector dynamics — rising feed and fuel costs tightening margins, even as consumer demand stays stable. Heritage’s strong value-added portfolio underscores the sector-wide shift from liquid milk to processed and branded dairy products to cushion profitability.
Procurement pressures, particularly amid regional competition and rising farmer payout rates, continue to challenge cost control. Strategic pricing and portfolio diversification will remain key levers for sustaining margins through FY25.
Heritage’s steady top-line growth and innovation in value-added products position it well in a market facing cyclical cost pressures but strong underlying demand for nutrient-rich dairy.
Source : Dairynews7x7 Oct 17th 2025