Heritage Foods displays Resilience Amid Severe Milk Supply Side Challenges and Elevated Input Costs
Heritage Foods Limited (BSE: 519552; NSE: HERITGFOOD), a leading Dairy Company offering milk and Value-added dairy products, announced its results for the year and quarter and year ended March 31, 2026.
Mrs. Brahmani Nara, Executive Director, Heritage Foods Limited alluded to “the company’s focus on strengthening procurement infrastructure, expanding distribution reach and scaling high-growth categories. With continued investments in premiumisation, new capacities and Value-added Products, we remain well positioned to drive sustainable long-term growth as industry conditions gradually normalise. Our consumer business continued to deliver healthy momentum led by strong growth across Value-added Products, premium categories and emerging channels. Categories such as curd, paneer, consumer fats and ice-creams recorded strong traction, while Q-commerce and Fresh Distribution scaled rapidly, strengthening market penetration and consumer engagement across key regions. Calibrated pricing actions and improving product mix also supported realisation growth during the year.”
Q4 & FY26 Results Key Highlights
Consumer Business Continues Double-Digit Growth Momentum
The business accelerated momentum delivered healthy growth – revenue grew 10% YoY to Rs. 11,576 million in Q4FY26 and 9% YoY to Rs. 45,260 million in FY26 despite weak flush season, milk shortages and prolonged weather-led disruptions across key markets.
Robust Category-Led Growth Across Value Added Products portfolio
VAP revenue grew 18% YoY to Rs. 3,957 million in Q4FY26 and by 13% YoY to Rs. 14,678 million in FY26, with VAP contribution improving to 35.5% in Q4FY26 versus 32.5% in Q4FY25 and to 35.3% in FY26 compared to 32.0% in FY25
VAP contribution including consumer-pack fats stood at 41.9% in Q4FY26 compared to 36.8% in Q4 FY25, while FY26 contributed 39.7% versus 36.7% in FY25
Strong VAP momentum continued, with paneer volumes growing 32% YoY in Q4 and 27% YoY in FY26, curd volumes rising 11% YoY in Q4 and 7% YoY in FY26, and ice cream volumes increasing 26% YoY in Q4 and 15% YoY in FY26, reflecting resilient consumer demand and improving product mix.
VAP growth aided by innovations; strong traction seen in new launches viz, Livo Yogurts, premium Sampurna A2 Curd, Nourish+ High Protein Paneer, Alpenvie Ice Cream range, etc.
Elevated Milk pricing and supply tightness, leads to margin shrinkage
Weak flush season across key regions drove average landed milk costs to Rs. 46.7/litre in Q4FY26, up 8% YoY, one of the sharpest raw milk inflations witnessed by the industry. This resulted in EBITDA margins shrinking by 311 bps to 4.5% YoY.
Procurement Network Demonstrated Resilience Amid Supply Constraints
Despite continued network expansion, severe supply-side challenges resulted in procurement volumes falling 7% YoY to 16.38 LLPD in Q4FY26.
Strong Pricing Discipline and Premiumization partly offset Milk Price Inflation
Timely and calibrated pricing actions along with higher VAP contribution supported blended realisation growth, with milk realisation increasing 4% YoY in Q4FY26 and 4% YoY in FY26, while VAP realisation improved 7% YoY in Q4FY26 and 9% YoY in FY26. Milk sales volumes grew 1% YoY to 11.73 LLPD in Q4FY26 and 2% YoY to 11.83 LLPD in FY26
Heritage Nutrivet Limited Delivers Strong Results
The wholly owned subsidiary, Heritage Nutrivet Limited, recorded a 33% YoY increase in revenue to Rs. 2,454 million in FY26. Profit before tax surged to Rs. 206 million, underscoring operational excellence and strategic execution.
Commenting further, Mrs. Brahmani Nara, said, “FY26 witnessed one of the toughest operating environments for the dairy industry in recent years, marked by severe milk shortages, elevated procurement inflation and weak flush season. Despite these challenges, Heritage Foods delivered resilient revenue growth of 9% YoY to Rs. 45,260 million, with quarterly revenues consistently sustaining above the Rs. 11,000 million mark, reflecting the strength of our consumer patronage and execution capabilities.”
Q4-FY26 Consolidated Financial Performance:
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Revenue: INR 11,576 mn – YoY: 10%
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Gross Margins: 22% – YoY: (308) bps
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EBITDA: INR 522mn – YoY: (35)%
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EBITDA Margin: 4.5% – YoY (311) bps
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PAT: INR 239mn – YoY: (37)%
Other Business Highlights
One-Time Employee Cost Impact Due to New Labour Codes
The Company recognised a one-time Rs. 48 million employee benefit provision during FY26 following implementation of the new Labour Codes under Ind AS 19.
Emerging Channels Continued to Scale Rapidly
E-Commerce & Q-Commerce revenues grew 56% YoY, while Fresh Distribution and other emerging channels grew 49% YoY, strengthening urban penetration and channel diversification.
Focused Brand Investments Enhanced Consumer Reach
Strategic campaigns, BIGG BOSS Kannada integration and launch of Certified Organic Cow Milk in Bengaluru strengthened brand visibility and consumer engagement across key markets.
Results for the quarter/year ended March 31, 2026, prepared under Ind AS, along with segment results, are available in the Investor Relations section of our website www.heritagefoods.in
