Heritage Foods Q2 FY27 results: net profit down 39.5% to ₹30.86 crore, revenue up 18.6%

How did Heritage Foods perform in Q2 FY27?

Heritage Foods reported consolidated Q2 FY27 revenue of ₹1,320 crore, up 18.6% from ₹1,113 crore in Q2 FY26. Revenue was down 1.4% from ₹1,338 crore in Q1 FY27. EBITDA declined 4.2% year on year to ₹73.97 crore, while the margin narrowed 1.3 percentage points to 5.6% from 6.9%.

Profit before tax was ₹42.60 crore, down 37.1% from ₹67.76 crore in Q2 FY26 but up 27.0% from ₹33.55 crore in Q1 FY27. The company reported a net profit of ₹30.86 crore, down 39.5% year on year and up 23.6% sequentially, with basic EPS of ₹3.38. On the standalone basis, revenue was ₹1,273.38 crore and profit was ₹30.52 crore.

What changed in Heritage Foods' costs and profit?

Cost of materials was ₹950.51 crore, up ₹202.50 crore or 27.1% from ₹748.01 crore in Q2 FY26, while employee cost rose ₹4.57 crore or 5.1% to ₹93.52 crore. Finance costs increased ₹3.42 crore or 89.1% to ₹7.26 crore, depreciation rose ₹7.36 crore or 36.6% to ₹27.47 crore, and other expenses increased ₹13.73 crore or 12.8% to ₹120.65 crore.

Total expenses rose ₹221.07 crore or 20.9% to ₹1,280 crore, while other income fell ₹1.80 crore or 34.8% to ₹3.37 crore. Q2 FY26 included an exceptional gain of ₹9.36 crore, whereas Q2 FY27 had no exceptional item. Tax expense fell ₹5.03 crore or 30.0% to ₹11.74 crore.

Management said average landed milk procurement cost increased 11% year on year to INR47.73 per litre because of sustained demand, limited improvement in milk arrivals, and higher feed and fodder costs. It also said procurement volumes rose 7% to 17.28 lakh litres per day and milk sales volumes increased 2% to 12.35 lakh litres per day.

How did the first half of FY27 go?

In H1 FY27, Heritage Foods reported consolidated revenue of ₹2,657.67 crore, up ₹408.4 crore or 18.2% from ₹2,249.27 crore in H1 FY26. Total income rose 18.0% to ₹2,667.45 crore, while EBITDA declined to ₹1,358 million from ₹1,511 million and its margin fell to 5.1% from 6.7%.

Profit before tax fell ₹46.56 crore or 37.9% to ₹76.15 crore, and profit after tax declined ₹35.71 crore or 39.0% to ₹55.83 crore. EPS was ₹6.1, down from ₹9.88 in H1 FY26. The investor presentation attributed the margin pressure to elevated milk procurement costs, while management said recent pricing actions and operating leverage supported sequential improvement.

What do the balance sheet and cash flow show?

Total assets were ₹1,998.49 crore on 30 September 2026, compared with ₹1,949.81 crore on 31 March 2026. Total equity rose to ₹1,140.83 crore from ₹1,108.11 crore, while borrowings increased to ₹345.22 crore from ₹324.13 crore and cash fell to ₹58.45 crore from ₹64.71 crore.

Inventories declined to ₹260.08 crore from ₹318.25 crore, while trade receivables increased to ₹78.58 crore from ₹71.15 crore and trade payables fell to ₹201.89 crore from ₹204.26 crore. In H1 FY27, operating cash flow was ₹174.14 crore, compared with ₹248.12 crore in H1 FY26; investing cash flow was an outflow of ₹157.84 crore against an outflow of ₹242.55 crore, while financing cash flow was an outflow of ₹22.56 crore against an inflow of ₹10.37 crore.

Capital expenditure in H1 FY27 was ₹175.12 crore, compared with ₹188.99 crore in H1 FY26. The filings did not provide a closing cash figure for either half-year period in the consolidated cash-flow data.

How has Heritage Foods done over the last 8 quarters?

Revenue increased year on year in each of the last eight quarters. Over the reported period, revenue was highest at ₹1,338.09 crore in Q1 FY27 and Q2 FY27 revenue was ₹1,319.58 crore. The latest reading was lower than that peak, while still above the ₹1,112.52 crore reported in Q2 FY26.

Profit after tax peaked at ₹50.99 crore in Q2 FY26 and fell to ₹23.94 crore in Q4 FY26 before recovering to ₹30.86 crore in Q2 FY27. EBITDA margin reached 7.5% in Q4 FY25, declined to 4.5% in Q4 FY26 and recovered to 5.6% in the latest quarter.

Which businesses drove the quarter?

Dairy remained the main business, reporting Q2 FY27 revenue of ₹1,288.77 crore, up 18.1% from ₹1,091.14 crore in Q2 FY26. Segment EBIT fell to ₹43.81 crore from ₹62.11 crore, with an EBIT margin of 3.4%.

Renewable energy revenue rose 21.4% to ₹3.97 crore from ₹3.27 crore, while EBIT increased to ₹2.16 crore from ₹1.60 crore and the EBIT margin was 54.4%. Feed revenue increased 46.7% to ₹85.25 crore from ₹58.11 crore, while EBIT fell to ₹3.33 crore from ₹5.25 crore; its EBIT margin was 3.9%.

What else did the company announce?

The board approved the unaudited standalone and consolidated financial results for the quarter and six months ended 30 September 2026, following review by the Audit Committee. It also took note of the limited review report of the statutory auditors on those results.

Heritage Foods filed an investor presentation with the results on 15 October 2026. The filing covered Q2 and H1 FY27 performance, procurement volumes and prices, value-added products, Heritage Nutrivet, premium and nutrition-led products, and other operating initiatives. No dividend, fund-raising or appointment was disclosed in the same-day filings.

What did Heritage Foods' management say?

Management said the company delivered 19% year-on-year revenue growth and a 98 basis points sequential recovery in EBITDA margin to 5.6%, despite elevated procurement costs. It said value-added products revenue, including ghee and butter, grew 31% to INR5,408 million and their share of revenue increased to 42.5% from 37.9%.

Management said the net weighted-average consumer price increase was about 8% in Q2, with September and early October increases meaningfully higher and expected to accrue in Q3. It said these actions, operating leverage and capitalised projects supported sequential margin improvement, but it declined to forecast the Q3 trajectory and no formal FY27 guidance was issued.

CEO Srideep Kesavan said: “If procurement prices go up, we'll again take consumer prices. We don't have an option, right?” He also said that a reduction of INR0.5 in milk procurement prices would improve the bottom line by 0.7%. Management identified milk inflation, feed and fodder costs, El Nino-related supply disruption, southern India drought conditions, and higher depreciation after project capitalisation as risks.

Management said Heritage Nutrivet Q2 revenue increased 47% to INR853 million, with profit before tax of INR37 million. It also said own-brand ice cream was trending at INR170-180 crore in FY27 against INR110 crore in the prior year, with a target of INR500 crore in 6-7 years.

How did Heritage Foods shares react?

Heritage Foods fell 4.2% within five minutes of the filing appearing and 3.0% after 15 minutes. From the pre-results close of ₹414.00, the stock closed 3.4% lower on the reaction day and was down 1.9% from that close by the next day's close.

By five sessions, the stock was down 16.2% from the pre-results close. The Dairy Products sector's median move was down 0.7% on the reaction day, down 0.3% by the next day's close and down 6.6% after five sessions. Heritage Foods' moves exceeded the sector median by 2.7 percentage points, 1.5 percentage points and 9.6 percentage points, respectively.

Past reaction-day moves were mixed: the stock fell 1.5% on 16 July 2026 and 7.0% on 11 May 2026, was unchanged on 15 October 2025, and fell 2.8% on 17 July 2025. Earlier readings included declines of 9.0% on 28 January 2026 and 4.6% on 16 May 2025, and gains of 2.1% on 22 January 2025 and 6.0% on 23 October 2024.

How did other Dairy Products companies do?

Five other Dairy Products companies had filed for the quarter by 4 November 2026. Their median revenue growth was 21.7%, compared with Heritage Foods' consolidated revenue growth of 18.6%.

Two of the five peers grew revenue more slowly than Heritage Foods, while three grew faster. Profit was higher for two of the five peers, based on results filed for the quarter.