Heritage Foods Q1: record revenue up 18% YoY but consolidated PAT slides 38% as milk costs bite

Heritage Foods delivered its highest-ever Q1 topline — consolidated revenue of ₹1,338.1 Cr, up 17.7% YoY (from ₹1,136.8 Cr) and 15.6% QoQ — but profitability was gutted: consolidated PAT fell 38.4% YoY to ₹24.97 Cr (from ₹40.55 Cr) and EPS dropped to ₹2.72 from ₹4.37. The sequential PAT uptick of ~4% is a seasonality artifact (Q1 is peak summer milk-sales season) and not the story; the year-on-year collapse is. Net profit margin compressed to 1.87% from 3.55% a year ago and 2.06% last quarter. Standalone tells the same story — PAT ₹24.77 Cr, down ~34% YoY — so the weakness is operational, not a consolidation quirk.

The squeeze sits squarely on the raw-material line: consolidated cost of materials consumed rose 26.7% YoY (₹807.3 Cr to ₹1,022.5 Cr), far outpacing 17.7% revenue growth, so higher milk volumes were sold into a rising procurement-cost environment. The core Dairy segment result fell to ₹37.6 Cr from ₹50.6 Cr despite higher segment revenue, and the Feed segment result dropped to ₹1.7 Cr from ₹6.6 Cr. This confirms — rather than contradicts — management's Q4 (May 2026) concall guidance, which explicitly warned that near-term procurement cost pressure would persist despite improving milk availability; the print validates that cautious framing but leaves the long-term ~9% EBITDA-margin ambition looking distant at this run-rate. No quarter-specific street consensus was published (the sell-side FY27 view is annual: ~₹4,950 Cr revenue, ~₹20.55 EPS), so a beat/miss verdict against Q1 estimates isn't available.

The stock went into the print at ₹337, up 2.3% over the past month of trading.

For context: revenue is at a 6-quarter high.

Alongside results the board approved two bolt-on consolidations that fit the stated premiumization/value-added push: raising its stake in Peanutbutter & Jelly Ltd (GETAWAY healthy-desserts brand, FY26 turnover ₹33.65 Cr) from 51% to 71% for ₹7.20 Cr cash, and buying the residual 5.60% of Heritage Novandie Foods (Livo yogurt) to take it to a wholly owned subsidiary. Both are small relative to the ₹1,338 Cr quarterly base and won't move near-term margins, but they extend the value-added-dairy strategy management is leaning on to lift mix over time.