1 August 2023

2 minute read

By: Global Ag Media

Asia

India's Heritage Foods posted a first-quarter profit on Monday that more than doubled, as higher milk prices and sales boosted revenue, reported Reuters.

The Hyderabad-based dairy products company said its consolidated net profit stood at 167.4 million rupees ($2 million) for the quarter ended June 30, compared with 72.8 million rupees a year earlier.

Milk prices in India hit a peak during the June quarter as a muted production season and heat waves resulted in lower output, analysts at ICICI Securities said.

The average selling price of milk shot up 11% year-on-year, boosting the company's revenue from the dairy business - its biggest segment - by 12% to 9.13 billion rupees.

The segment, which comprises both milk and milk-based products, also contributed more than 98% to the company's total revenue, while earnings before interest, taxes, depreciation and amortization (EBITDA) surged 67.9%.

The rise in revenue helped soften the impact of an 11% rise in total expenses to 9.01 billion rupees, led by an 11% increase in the cost of material consumed. Average milk procurement rose 9% to 1.52 million litres per day during the quarter.

Heritage Foods, which counts ice cream, buttermilk and ghee among its products, said its total revenue from operations rose 12.5% to 9.24 billion rupees.

Earlier this month, peer Hatsun Agro product HAPL.NS said it posted a 54% rise in its June-quarter profit.

Shares of the dairy producer closed down 6.75% at 246.75 rupees after the results.

($1 = 82.2670 Indian rupees)