Heritage Foods flags milk-cost pressure as Q2FY27 margin stays at 5.61%
Elevated procurement costs remained the main disclosed pressure, while management outlined premiumisation and VAP expansion as margin levers.
Filed 15 Oct 2026, 15:10 IST · Heritage Foods Ltd (HERITGFOOD)
Key takeaways
- Heritage Foods reported consolidated Q2FY27 net profit of Rs 30.86 cr, with EPS of Rs 3.38.
- Milk procurement prices rose 11% YoY to Rs 47.73 per litre, while procurement volumes increased 7% to 1.73 MLPD.
- Management said it expects gross margins to reach 23% by FY28E through premiumisation, cost control and operating leverage.
Price around the results
Q2 profit conversion was reduced below the operating level
Heritage Foods' consolidated operating profit of Rs 73.97 cr became profit before tax of Rs 42.60 cr after Rs 7.26 cr of interest and Rs 27.47 cr of depreciation. Tax of Rs 11.74 cr then reduced net profit to Rs 30.86 cr. Other income contributed Rs 3.37 cr to profit before tax, while the tax rate was 27.56%.
Milk procurement costs were the disclosed margin pressure
The company reported that milk procurement prices increased 11% YoY to Rs 47.73 per litre in Q2FY27. Management said elevated milk procurement costs and near-term cost pressures persisted. The consolidated operating margin was 5.61%, with management pointing to tight cost control and operating leverage as longer-term margin levers.
Volumes grew as the company targets premium and value-added categories
Procurement volumes rose 7% YoY to 1.73 MLPD, indicating higher input volumes alongside the increase in procurement prices. Management said it is focused on expanding value-added products capacity and accelerating innovation in premium and nutrition-led categories. The company also said it expects gross margins of 23% by FY28E.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 |
|---|---|
| Revenue | ₹1,320 cr |
| Other income | ₹3 cr |
| Expenses | ₹1,246 cr |
| Operating profit | ₹74 cr |
| Operating margin (%) | 5.61% |
| Interest | ₹7 cr |
| Depreciation | ₹27 cr |
| Profit before tax | ₹43 cr |
| Tax | ₹12 cr |
| Net profit | ₹31 cr |
| EPS (₹) | ₹3.38 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q2 FY27 procurement volumes rose 7% year on year to 1.73 MLPD.
Guidance & outlook
- The company expects higher gross margins of 23% by FY28E.
- The company remains confident in achieving sustainable margin improvement through premiumisation, cost control and operating leverage.
Expansion
- The company is focused on expanding VAP capacity and accelerating innovation in premium and nutrition-led categories.
New initiatives
- The company has full facility coverage under a waste minimization and recycling framework.
- The company conducts annual strategic business planning with channel partners to foster long-term partnerships.
Problems & risks
- The company reported elevated milk procurement costs in Q2 FY27.
- The company said near-term cost pressures persist.
- Milk procurement prices increased 11% year on year to Rs 47.73 per litre in Q2 FY27.
What to watch
- Whether consolidated operating margin holds above 5.61%.
- Whether milk procurement prices moderate from Rs 47.73 per litre.
- Progress in procurement volumes from 1.73 MLPD and in the company's stated 23% FY28E gross-margin objective.