Heritage Foods has reported a net profit of ₹43.1 crore in the third quarter ended December 31, 2024 as against ₹26.9 crore in the same quarter last year, showing a growth of 60 per cent. It registered a revenue of ₹1,034 crore in the quarter as against ₹941 crore in the comparable quarter last year, showing a growth of 10 per cent.

“Making products more available through a wider distribution network helped the company increase its revenues. We have a network of 352 Heritage Happiness Points, which contribute around 5.5 per cent of the company’s revenue,” Srideep M Kesavan, Chief Executive Officer of Heritage Foods, told businessline.

The ‘happiness points’ are company-owned, franchisee-operated stores where the entire range of products are available. “We are adding about 30-40 happiness points each quarter,” he said.

He said the company worked with about 300 FMCG distributors for long and ambient shelf-life products, reaching 50-60,000 outlets.

He also attributed the increase in sales to increased marketing expenditure. “We spend about 0.85 per cent of our revenues on marketing. This helped us increase sales of value-added products. Three years ago, this segment contributed 24-25 per cent of revenue. Now this has gone up to 32.3 per cent,” he said.

“Understanding consumer needs and introducing new products, such as probiotic buttermilk is helping in increase in revenues. For one probiotic milk, a relatively new product, now contributes 15 per cent of our buttermilk sales,” he said.

Price increase

Stating that the company has begun to selectively increase prices on some of its products due to inflationary pressures. These increases are subtle and staggered. “We have not increased prices for 18 months, starting from May 2023. The inflationary pressure eventually needs to be passed on. You know there’s only so much we can absorb,” he pointed out.

Outlook

He said the growth momentum will continue into the fourth quarter. The beginning of summer should accelerate sales of summer-related products like curd, buttermilk, drinkables, and ice cream. The price increases will also contribute to revenue growth.

For the nine-month period, the company reported a net profit of ₹150 crore, showing a growth of 127 per cent on a revenue of ₹3,086 crore, which grew by 9 per cent.

Published on January 23, 2025