Hindustan Foods lifts margin as shoes division turns profitable
Revenue grew faster than expenses sequentially, but higher interest costs and a slightly higher tax rate capped profit growth.
Filed 05 Nov 2026, 17:32 IST · after market close · Hindustan Foods Ltd (HNDFDS)
Key takeaways
- Consolidated operating margin improved 0.49 percentage points sequentially to 8.84% as revenue growth of +5.41% exceeded expense growth of +4.84%.
- Interest costs rose +12.69% sequentially, while the tax rate increased 0.35 percentage points, limiting net profit growth to +5.29%.
- The operating margin was 1.88 percentage points below the 10.72% median for 55 reported FMCG peers.
Price around the results
Revenue momentum improved in Q2FY27
Consolidated revenue increased +5.41% sequentially to Rs 1,266.01 cr, while expenses rose +4.84%, allowing operating profit to grow +11.56%. Management said the shoes division turned profitable in Q2FY27, while the Silvassa brownfield liquid detergent plant began commercial production during the quarter. The presentation also said footwear supply-chain disruption and about 1.5 months of flood-related disruption at Silvassa had affected H1FY27 profitability.
Margin widened, but financing costs rose faster
Operating margin expanded 0.49 percentage points to 8.84% because revenue grew faster than expenses. Interest costs increased +12.69% sequentially and depreciation rose +6.07%, which helped keep profit before tax growth to +5.78% despite the operating improvement. Other income contributed 3.43% of pre-tax profit, so reported earnings were not materially dependent on non-operating income; the tax rate rose 0.35 percentage points to 24.78%.
Margin remains below the reported FMCG peer median
Hindustan Foods' 8.84% operating margin was 1.88 percentage points below the 10.72% median among 55 FMCG peers that had reported the quarter. Sequentially, however, margin direction improved from 8.35% in Q1FY27 to 8.84% in Q2FY27. With only two quarters in the trend, this shows a quarter-on-quarter recovery rather than a longer established trend.
Management points to footwear recovery and capacity additions
Management said the footwear order book is full until March 2027 and that profitability is expected to ramp up further in H2FY27. It reiterated FY27 PAT guidance of Rs 200-220 cr and said it expects to land around Rs 200 cr. The company said the Lucknow detergent bar plant and Goa Greek yoghurt plant are scheduled for Q4FY27 commercialisation, while Phase II of the Panipat ice cream plant is expected to double existing manufacturing capacity by Q4FY27.
Results were filed after market close
The consolidated results were filed at 17:32 IST on 5 November 2026, after market close. The stock's immediate response is therefore not covered here.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹1,266 cr | ₹1,201 cr | +5.41% |
| Other income | ₹2 cr | ₹6 cr | -64.78% |
| Expenses | ₹1,154 cr | ₹1,101 cr | +4.84% |
| Operating profit | ₹112 cr | ₹100 cr | +11.56% |
| Operating margin (%) | 8.84% | 8.35% | — |
| Interest | ₹26 cr | ₹23 cr | +12.69% |
| Depreciation | ₹28 cr | ₹26 cr | +6.07% |
| Profit before tax | ₹60 cr | ₹57 cr | +5.78% |
| Tax | ₹15 cr | ₹14 cr | +7.31% |
| Net profit | ₹45 cr | ₹43 cr | +5.29% |
| EPS (₹) | ₹3.71 | ₹3.53 | +5.10% |
Operating margin of 8.84% compares with a Fast Moving Consumer Goods sector median of 10.72% across 55 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The shoes division turned profitable in Q2FY27.
- The Silvassa brownfield liquid detergent plant commenced commercial production in Q2FY27.
Guidance & outlook
- The company reiterated FY27 PAT guidance of Rs. 200–220 crore and expects to land around Rs. 200 crore.
- Footwear profitability is expected to ramp up further in H2FY27, supported by an order book full until March 2027.
- The company expects significantly stronger CFO in H2FY27 from net revenue recognition and GST changes.
Expansion
- The brownfield liquid detergent plant in Silvassa commenced commercial production in Q2FY27.
- The Lucknow detergent bar plant, with Rs. 50 crore capex, is scheduled to commence production in Q4FY27.
- The Greek yoghurt manufacturing plant in Goa, with Rs. 60 crore capex, is scheduled for commercialisation by Q4FY27.
- Phase II of the Panipat ice cream plant, with Rs. 80 crore capex, will double existing manufacturing capacity by Q4FY27.
New orders
- The footwear division's order book is full until March 2027.
New initiatives
- The company has begun moving selected customer businesses from gross to net revenue recognition to release working capital.
Problems & risks
- The footwear business faced cost pressures from higher raw material costs and revised wage rates.
- H1FY27 profitability was affected by footwear supply-chain disruptions and about 1.5 months of flood-related disruption at Silvassa.
- Commissioning of several projects was deferred by 1–2 months because of delays in critical imported equipment supplies.
- Continuing geopolitical uncertainty led the company to maintain a prudent inventory stance through H1FY27.
What to watch
- Whether operating margin holds above 8.84% after improving from 8.35% in Q1FY27.
- Whether interest-cost growth moderates from +12.69% sequentially.
- Progress toward management's stated FY27 PAT guidance of Rs 200-220 cr and the scheduled Q4FY27 capacity additions.