Heritage Foods Ltd reported a 14.8% year-on-year increase in revenue from its value-added products (VAP) segment, reaching ₹3,417 million in the second quarter of FY26, driven by steady consumer demand, portfolio expansion, and strategic pricing initiatives.
Despite challenging weather and fluctuations in milk procurement costs, the company maintained operational resilience by leveraging its diversified sourcing network across key regions. Milk procurement volumes stood at 16.1 lakh liters per day, marginally lower by 2% year-on-year, as Heritage prioritized high-margin VAP categories over bulk sales during a lean production phase marked by butter shortages.
Strong demand for curd, drinkables, paneer, and ice cream propelled a 15% year-on-year rise in VAP sales, with overall volumes up 10.4%. The company also reduced its low-margin B2B fat sales by 86% while expanding its B2C portfolio, which grew 35% year-on-year. This strategic shift improved profitability and enhanced the quality of earnings.
A calibrated 4.5% price increase, combined with a premium product mix, helped offset higher input costs. Net milk realization rose by ₹2.43 per liter, reflecting sustained consumer confidence and strong brand positioning.
Following the September GST revision, Heritage passed on benefits to consumers through total price cuts, improving competitiveness against unorganized sector players. Integration of HNFPL and co-branded initiatives under the LIVO label on Flipkart also contributed to market reach and digital visibility.
Looking ahead, Heritage expects festive demand, better milk availability during the flush season, and recently commissioned VAP and ice cream capacities to drive growth in the second half of FY26. The company remains focused on strengthening its value-added dairy portfolio, expanding retail reach, and improving operating margins through efficiency-led growth.
