Heritage Foods Q2 FY27 Results (NSE: HERITGFOOD)
Signal: Steady quarter
The read
The trajectory has shifted from revenue-led recovery to margin defense: consolidated revenue grew 18.6% YoY to 13195.80 million, but gross margin compressed 588bps to 21.8% and PAT fell 39.5% to 308.57 million; the sequential gross-margin improvement of 210bps is encouraging but does not yet reverse the prior period of operating-margin contraction.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,319.58 Cr | +18.6% | -1.4% |
| Net profit | ₹30.86 Cr | -39.5% | |
| EPS | ₹3.38 | -38.5% | |
| EBIT margin | N/A |
P&L walk
Revenue increased 18.6% YoY to 13195.80 million, but gross margin compressed to 21.8% from 27.7% as raw materials rose to 72.0% of revenue from 67.2%; finance costs increased 89.1% and PAT fell 39.5% to 308.57 million.
Segments
Dairy remains the earnings driver with 12887.74 million of revenue and 438.07 million of segment result, while Feed is the fastest-growing unit at 852.50 million of revenue, up 46.7% YoY; Renewable energy contributed 21.57 million of result.
Key positives
- Consolidated revenue reached 13195.80 million, up 18.6% YoY, despite a 1.4% sequential decline.
- Feed revenue increased 46.7% YoY to 852.50 million, making it the fastest-growing disclosed segment.
- Gross margin improved 210bps sequentially to 21.8%, indicating partial recovery from the prior quarter's 19.7% calculated margin.
- Dairy segment result remained positive at 438.07 million and Renewable energy result rose 34.7% YoY to 21.57 million.
- PPE and CWIP increased alongside depreciation, and the depreciation-to-capex cross-check is clean.
Key concerns
- Gross margin compressed 588bps YoY to 21.8% as raw materials rose to 72.0% of revenue from 67.2%; the filing does not disclose a specific mitigation driver.
- PAT fell 39.5% YoY to 308.57 million despite 18.6% revenue growth, showing that current growth is not converting into earnings.
- Finance costs increased 89.1% YoY to 72.64 million on a consolidated basis and 104.8% to 73.37 million standalone.
- The consolidated revenue base declined 1.4% sequentially from 13380.94 million, while the margin recovery remains incomplete.
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