Heritage Foods' record revenue obscured by margin pressure and low plant utilization
EBITDA margin falls to 4.6% as milk costs rise; VAP growth strong but ice cream plant runs at 40% capacity. ₹250 cr capex plan targets 50% VAP share by FY30.
— 2 earlier stories on Heritage Foods Ltd. →What's new
- Record quarterly revenue of ₹13,381M, up 18% YoY.
- EBITDA margin squeezed to 4.6% on 7% rise in milk procurement cost.
- VAP revenue jumps 40% to ₹5,636M; ice cream hits ₹550M but plant at 40% utilization.
Why this matters
Heritage is growing top-line aggressively, but every rupee of added revenue comes with cost pressure. The low utilization at the ice cream facility questions the immediacy of the ₹250 cr capex plan. Margin recovery remains uncertain without a clear timeline.
What we're watching
- Milk procurement cost trajectory – any relief could boost margins.
- Ice cream facility utilization – needs to rise from 40% to justify capex.
- VAP margin recovery timeline – management declined to provide one.
The full read
Heritage Foods posted a record ₹13,381 million in consolidated revenue, up 18% year-on-year, but the EBITDA margin slipped to 4.6% as milk procurement costs rose 7% to ₹46.61 per liter. Value-added products were the star, with revenue jumping 40% to ₹5,636 million and ice cream crossing ₹550 million in a single quarter. Yet the VAP story is uneven: EBITDA margin for the segment contracted 164 bps year-on-year, and the ice cream facility ran at just 40% utilization, the low end of guidance. Management's answer is a ₹250 crore capex plan for FY27 and a target to push VAP to 50% of revenue by FY30, though they offered no timeline for margin recovery. The headline growth is real, but so is the cost pressure. Milk prices and plant utilization are the real metrics to watch.
Questions answered
- Why did Heritage Foods' EBITDA margin fall despite record revenue?
- Milk procurement costs rose 7% to ₹46.61 per liter, squeezing gross margins. The EBITDA margin dropped to 4.6% from a higher base a year ago.
- How did value-added products perform?
- VAP revenue jumped 40% to ₹5,636 million, accounting for a growing share of total sales. Ice cream alone crossed ₹550 million in quarterly sales.
- What is the capacity utilization at the ice cream plant?
- The ice cream facility ran at only 40% utilization, at the low end of earlier guidance. This suggests room for volume growth without significant new capex.
- What is the ₹250 crore capex plan for?
- Management intends to spend ₹250 crore in FY27, likely to expand VAP capacity and improve efficiency, though specific projects were not detailed.
- When does Heritage aim for VAP to reach 50% of revenue?
- The target is FY30, but management declined to provide specific margin recovery timelines for the VAP segment.
Heritage Foods Ltd.
Latest quarter · Jun 2026
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All notes on HERITGFOOD →- 17 Jul 2026 · 5:25 PM IST Heritage Foods' record revenue obscured by margin pressure and low plant utilization
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