Indian dairy leader sees market sell-off as Q3 earnings show squeezed margins and weaker net income.
Heritage Foods Ltd, a prominent Indian dairy and value-added products company, saw its share price plunge more than 10% after reporting a significant year-on-year decline in net profits for Q3 FY26, triggering investor concern over profitability and sector headwinds. The stock drop underscores how financial markets are reacting to margin compression even when topline growth remains positive.
The company’s revenue from operations increased about 8% year-on-year to ₹1,119 crore, reflecting steady demand for its core dairy and value-added products. On a sequential basis, quarterly revenue edged up slightly, but this was not enough to offset broader cost pressures affecting the business.
Despite the revenue uptick, Heritage’s profit after tax (PAT) fell sharply — down around 19% YoY to ₹35 crore from ₹43 crore in the same quarter last year, with robust sequential declines also visible. Elevated milk procurement costs and supply constraints contributed to the squeeze, underscoring structural challenges facing dairy processors in India’s competitive market.
Value-added products remained an important growth engine: revenue from VAPs grew nearly 14% YoY, with segments like ghee, butter, curd, paneer and drinkables contributing to expansion. However, higher input prices — especially a 9% rise in raw milk procurement costs — compressed gross margins and weighed on EBITDA and PAT margins during the period.
Operationally, milk procurement volumes were down about 9% YoY, though they improved modestly quarter-on-quarter, suggesting some recovery in supply. The company is also planning new ice cream and flavoured milk lines in Q4 FY26 to capture additional demand and support future growth, but near-term financial results highlight the volatility dairy processors face amid supply chain pressures and rising costs.
Source: Trade Brains – Heritage Foods share crashes 10% after reporting massive decline in net profits in Q3
https://tradebrains.in/heritage-foods-share-crashes-10-after-reporting-massive-decline-in-net-profits-in-q3/
You can now read the most important #news on #eDairyNews #Whatsapp channels!!!
🇮🇳 eDairy News ÍNDIA: https://whatsapp.com/channel/0029VaPidCcGpLHImBQk6x1F
