Heritage Foods shares surge on Q1 performance

Heritage Foods Ltd.’s shares went up by 2.82 per cent after the company reported a 130 per cent increase in profit for the quarter that ended June 30th, 2023, at Rs 16.73 crore compared to Rs 7.27 crore during the corresponding quarter last year. The company’s revenues were up by 12 per cent to Rs 923.68 crore compared to Rs 820.92 crore last year. Sequentially, the company’s profits were lower by 6 per cent compared to Rs 17.92 crore in the previous quarter

According to a report by ICICI Securities, the company had a robust 12.5 per cent YoY revenue growth in Q1 FY24. Milk procurement increased by 9 per cent YoY, while milk and value-added product revenues rose by 9.8 per cent and 13.5 per cent, respectively. With strategic input price corrections and price hikes, the gross and EBITDA margins expanded by 166 bps and 145 bps, respectively, YoY

.However, aggressive price hikes (11 per cent YoY) affected milk volumes, leading to a 1 per cent volume decline YoY. The average milk procurement price increased by INR 3.78 per litre, while selling prices rose by INR 5.4 per litre. Despite the volume decline, value-added products’ revenue contribution improved to 38.7 per cent in Q1 FY24.

Heritage pursued distribution expansion initiatives, adding 20,000 retail outlets in general trade and over 1,000 for ice cream and value-added products. Additionally, the company launched nearly ten new products in Q1 FY24, demonstrating a commitment to innovation and growth.

The shares went up by 2.82 per cent to Rs. 253 at 2:56 p.m. on BSE.

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