Hyderabad, May 16, 2025 – Heritage Foods Limited (BSE: 519552, NSE: HERITGFOOD), a leading Indian dairy and renewable energy company, has unveiled its audited financial results for the quarter and fiscal year ended March 31, 2025. The board’s resolutions, announced on May 16, 2025, reveal a year of robust growth, strategic acquisitions, and shareholder-friendly initiatives. This article delves into the company’s financial health, key decisions, and future outlook, positioning it as a compelling player in India’s fast-moving consumer goods (FMCG) sector.
Key Highlights of FY25 Financial Performance
- Revenue Growth: Standalone revenue surged to ₹40,804.81 million in FY25, up 9.3% from ₹37,343.45 million in FY24.
- Profit Surge: Net profit skyrocketed by 84.7% to ₹1,680.82 million (standalone) and 76.7% to ₹1,882.80 million (consolidated).
- Dividend Declaration: A final dividend of ₹2.50 per share (50% of face value) proposed, pending shareholder approval.
- Borrowing Limit Expansion: Board approves increasing borrowing limits from ₹500 crores to ₹800 crores for future expansions.
- Strategic Acquisition: Heritage acquires 71 lakh shares in joint venture Heritage Novandie Foods Private Limited (HNFPL), boosting ownership to 94.4%.
Heritage Foods: A Snapshot of Financial Resilience
Standalone Financial Performance
The company’s standalone revenue from operations climbed to ₹40,804.81 million in FY25, driven by strong demand in its core dairy segment, which contributed 99.6% of total revenue. Other income, including interest and dividends, added ₹272.84 million.
Profitability Metrics:
- EBITDA: Improved margins due to cost optimization; standalone EBITDA rose to ₹2,568.36 million.
- Net Profit: Jumped to ₹1,680.82 million (FY25) from ₹910.38 million (FY24), reflecting better operational efficiency and lower tax outflows.
- Earnings Per Share (EPS): Standalone EPS stood at ₹18.11, nearly doubling from ₹9.81 in FY24.
Segment-Wise Breakdown:
- Dairy: Revenue grew 9.3% YoY to ₹40,798.66 million.
- Renewable Energy: Contributed ₹87.70 million, though margins remain slim.
Balance Sheet Strength:
- Total Assets: Increased to ₹15,180.10 million (FY25) from ₹12,597.50 million (FY24), fueled by investments in property, plant, and equipment (PPE).
- Debt Management: Borrowings rose to ₹1,341.94 million (FY25), but the debt-to-equity ratio remains conservative at 0.14, signaling prudent leverage.
Consolidated Financials: Expanding Horizons
Including subsidiaries and joint ventures, consolidated revenue reached ₹41,345.95 million, up 8.9% YoY. The feed segment, a newer vertical, contributed ₹1,849.27 million, highlighting diversification efforts.
Key Consolidated Metrics:
- Net Profit: ₹1,882.80 million (up 76.7% YoY).
- EPS: Consolidated EPS soared to ₹20.29, reflecting synergies from subsidiaries.
Dividends and Shareholder Returns
Heritage Foods continues its tradition of rewarding shareholders. The board recommended a final dividend of ₹2.50 per equity share (50% of face value of ₹5), subject to approval at the 33rd Annual General Meeting (AGM) on July 31, 2025. Key dates:
- Record Date: July 23, 2025
- Payment Date: August 7, 2025
This marks a 25% increase from the ₹2.00 per share dividend declared in FY24, underscoring confidence in sustained profitability.
Strategic Moves: Acquisition of HNFPL and JV Restructuring
A pivotal decision in FY25 was the acquisition of 71 lakh equity shares (94.4% stake) in HNFPL from Novandie, France, for ₹85 million. HNFPL, a loss-making yogurt-focused JV since 2017, will now become a subsidiary.
Rationale Behind the Acquisition:
- Turnaround Strategy: Heritage aims to revamp HNFPL’s operations by expanding product lines (e.g., probiotic drinks) and leveraging its distribution network.
- Financial Impact: HNFPL reported a net loss of ₹254.63 million in FY25, but Heritage’s majority stake allows greater control to streamline costs and revive growth.
Revised Joint Venture Agreement:
- Amendments include revised shareholding, non-compete clauses, and operational control.
- Heritage gains rights to use Novandie’s branding and technology, enhancing its premium dairy portfolio.
Corporate Governance and Compliance
Auditor Appointments
- Statutory Auditors: Walker Chandick & Co LLP issued an unmodified audit opinion, validating the accuracy of financials.
- Secretarial Auditors: M/s. Ravi & Subramanyam appointed for a 5-year term starting FY26, ensuring adherence to SEBI’s Listing Obligations and Disclosure Requirements (LODR).
Borrowing Limit Expansion
The board approved raising borrowing limits under Section 180(1)(c) of the Companies Act, 2013, to ₹800 crores (from ₹500 crores). Funds will likely finance:
- Capacity expansion in dairy processing.
- Renewable energy projects to reduce carbon footprint.
- Working capital needs for HNFPL’s turnaround.
Challenges and Risk Factors
- Commodity Price Volatility: Rising feed and fuel costs could pressure margins.
- HNFPL Integration Risks: Turning around the JV requires significant investment and market repositioning.
- Regulatory Compliance: SEBI’s stricter LODR norms demand continuous disclosure and governance upgrades.
Future Outlook: Positioning for Sustainable Growth
Growth Drivers:
- Dairy Dominance: With 80% of revenue from dairy, Heritage plans to introduce value-added products like organic milk and lactose-free variants.
- Renewable Energy Push: Investments in biogas plants to reduce energy costs and align with ESG goals.
- Geographic Expansion: Penetrating underserved markets in North and East India.
FY26 Projections:
- Revenue growth of 12–15% driven by volume and pricing power.
- HNFPL expected to break even by Q4 FY26.
Conclusion: A Compelling Investment Proposition
Heritage Foods’ FY25 performance cements its position as a resilient player in India’s FMCG sector. With strong financials, strategic acquisitions, and a shareholder-friendly approach, the company is well-poised to capitalize on India’s growing demand for dairy and sustainable products. Investors should watch for execution on HNFPL’s turnaround and margin improvements in renewable energy.
As the 33rd AGM approaches, shareholders have much to anticipate—from dividend payouts to insights into the next phase of growth. Heritage Foods isn’t just churning milk; it’s churning value.
FAQs
Q1: What is Heritage Foods’ dividend yield for FY25?
A: At the current share price of ₹550, the dividend yield stands at 0.45% (₹2.50 dividend ÷ ₹550).
Q2: Why did Heritage acquire a loss-making HNFPL?
A: The acquisition grants full operational control to revamp product lines and leverage synergies with Heritage’s distribution network.
Q3: How does Heritage plan to utilize the increased borrowing limit?
A: Funds will likely expand dairy infrastructure, invest in renewable energy, and support HNFPL’s turnaround.
Q4: Is Heritage Foods compliant with SEBI’s LODR regulations?
A: Yes, the company has adhered to disclosure norms, as validated by its auditors.
Q5: What is the long-term vision for the renewable energy segment?
A: Heritage aims to achieve 20% of energy needs from renewable sources by 2030, reducing costs and carbon footprint.
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