Heritage Foods Ltd (NSE: HERITGFOOD) Q1 2026 Earnings Call dated Jul. 18, 2025
Corporate Participants:
Unidentified Speaker
Brahmani Nara — Executive Director
Sambasiva Rao — Whole Time Director
A Prabhakara Naidu — Chief Financial Officer
Upendra Pandey — Chief Executive Officer, Heritage Nutrivet
J. Samba Murthy — Chief Operating Officer
Srideep Kesavan — Chief Executive Officer
Analysts:
Unidentified Participant
Garima Singla — Analyst
Sameer Gupta — Analyst
Aniruddha Joshi — Analyst
Pratik Kothari — Analyst
Shirish Pardeshi — Analyst
Resha Mehta — Analyst
Kiran Kumar — Analyst
Harsh Shah — Analyst
Param Vora — Analyst
Rahil Shah — Analyst
Pavan Kaware — Analyst
Lakshminarayanan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Heritage Foods Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Garima Singhala. Thank you. And over to you, Ms. Singhala.
Garima Singla — Analyst
Thank you. Good morning everyone. I am Garima Singla and it’s my pleasure to welcome you on behalf of Heritage Foods Limited. Thank you for joining us today for quarter one financial year 26 earnings call. This call is being hosted by Goindia Advisor. Please note that today’s discussion may include certain forward looking statements. Therefore they must be viewed in conjunction with the risks that the company faces today. On the call we are joined by Mrs. Nara Brahmani, Executive Director, Dr. Samba Siva Rao, Whole Time Director, Mr. Srideep Kesavan, CEO Mr. A. Prabhakara Naidu, CFO Mr. J.
Samba Murthy, COO, Mr. Upendra Pandey, CEO, Heritage New Privet and Mr. Umakanta Barak, CS and Compliance Officer. I now invite Dr. Rao to present the company’s business outlook and performance. After which we will open the floor for Q and A. Thank you. And over to you sir.
Sambasiva Rao — Whole Time Director
Good morning everyone. Thank you for joining us today. Heritage Food steps into financial year 26 with renewed energy. Entering its 34th year at Heritage, this quarter marked the celebration of 33 years of purpose led growth built on farmer empowerment, strong corporate governance and innovation. While quarter one was shaped by weather related challenges including an erratic monsoon and an unseasonably cool summer across our core markets, we view these are short term disruptions within an otherwise resilient growth trajectory. The core of Heritage remains unchanged. That is a robust procurement network, deep consumer trust, strong brand recall and disciplined execution.
Despite a muted seasonal start, I am pleased to share that company delivered its highest ever quarter revenue of 11,368 million rupees. Our third consecutive quarter of double digit revenue growth. This performance reflects the strength of the core business and agility of our supply chain networks. Early rains temporarily impacted demand for value added products such as curd, buttermilk, flavoured milk and ice cream. However, June brought a clear recovery with volumes rebounding across most of the categories. As a result, revenues from value added products including ghee and butter consumer packs stood at 4,540 million rupees growing at 7.4% year on year and contributing over 40% to the top line.
On the profitability front, EBITDA came in at 739 million with a 6.5% margin and PAT stood at 405 million rupees with a 3.6% PAT margin. Year on year margins were softer due to seasonality, input, cost inflation and a temporary product mix shift, but are expected to normalize in the coming quarters as volume led operating leverage kicks in. On the operational side, milk procurement rose 10% year on year to 17.8 lakh litres per day, supported by quality linked sourcing from over 300,000 farmers across 9,000 villages. Milk sales grew at 2.8% year on year to 11.6 lakh litres per day with average realizations improving to 56.4 rupees per litre reflecting strong pricing power and stable demand over the past year, several strategic actions have laid the foundation for the next phase of our growth.
I’ll list out a few. An additional 44% of 4% stake was acquired in Heritage Navande Foods Private Limited increasing the holding of Heritage Foods to 94.4% and ensuring a strategic control of the yogurt supply chain. The upcoming Greenfield ice cream facility, expected to be operational by end of calendar year 25 is set to unlock new product and market opportunities for us. 360 degree brand campaigns were rolled out across our core states, Andhra Pradesh, Telangana, Tamil Nadu and Karnataka, enhancing visibility and deepening consumer engagement. The Heritage Levo Healthy Living Platform was introduced with a fortified flavored milk range with vitamins A and D and high protein yogurts targeting the growing healthy conscious consumer segment Health conscious consumer segment.
Heritage NutriWet Ltd. The animal nutrition subsidiary continued its stellar performance. Revenue during quarter one grew at 26% year on year to 533 million rupees. Profit before tax surged to 130% year on year to 67 million rupees. This vertical is quickly becoming a strategic differentiator, driving farmside innovation and deepening supplier loyalty. Further, Heritage was recognized among India’s best workplaces in FMCG 2025 by Great Place to Work Institute, a reflection of our inclusive culture and high trust workplace environment. Meaningful progress continues on our Vision 2030 roadmap anchored on four strategic pillars premiumization, digitalization, sustainability and people first governance.
Digital first delivery systems are being deployed, Last mile logistics are being strengthened and farmer engagement is deepening, all contributing to a traceable farmer first supply chain and long term sustainability. FY26 is not just a continuation but a consolidation phase, aligning strong operating momentum with strategic depth and focused execution. With an expanded portfolio, a strong consumer patronage and an unwavering commitment to innovation and farmer empowerment, Heritage is well positioned to deliver positive momentum and strengthen its growth trajectory through the rest of the financial year 26 and beyond. A heartfelt thank you to our farmers, consumers, customers, team members, partners and shareholders for your continued trust and support.
Now I open the floor for question and answers. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Sameer Gupta with India Infoline. Please go by the
Sameer Gupta
hello, good morning and thank you for taking my question sir. Firstly on milk procurement prices. Now the feedback in early May was that these milk procurement prices are kind of moderating but in your case you’re not seeing any such moderation and in fact we are up sequentially. So has anything changed versus, you know, in the middle of the quarter or is it specific to, you know, your geographies of procurement and outlook going forward?
Srideep Kesavan
Yeah, thank you Sameer for this question. Nothing has changed actually the the raw milk prices had as in I should say that if you look at a year on year change it is just 4.74 percentage, a tad higher than what we would have liked. But I won’t say this is anything extraordinary and usually in quarter one in the months of May and June it goes up a little bit because that’s actually the peak of the lean season. If you recall, the raw milk prices had started going up from the month of December, December and January.
We saw some price increases then again a bit of increase in April and May. Nothing extraordinary except that on a similar proportion we were not able to pass on to the consumer because of multiple reasons which in our opening statement we called out number one, due to the mix change primarily because value added products came down significantly from what we would have expected. Second is in certain cases, certain deliberate decisions made to hold prices to drive sales volume growth happened and the mix change. Apart from that, nothing extraordinary happened as far as the farm level prices are concerned.
It was as expected.
Sameer Gupta
Okay. And just A clarification. The pricing changes are primarily in value added products or liquid milk or both.
Srideep Kesavan
In both. But primarily more in value added products. We did not change any prices. I was just saying that certain deliberate choices to hold price increases to ensure volumes stay strong during the April May month. This is only the initial period of the quarter one that I’m talking about. By the month of June all numbers had normalized. Actually in fact they were looking pretty strong.
Sameer Gupta
Got it. Sir. Second question is on fat sales. Now these are up 73% on a yoy basis. Typically this is a quarter where consumption of branded fat is lower. Ghee and butter. So and just a quantification of the bulk fat sales this quarter. Also if you can quantify the fat losses at a gross margin level.
Srideep Kesavan
Yeah. Please give us a minute. Bulk fat sale is.
J. Samba Murthy
This is Samamurthi. So it’s about 620 tons we have sold during Q1.
Sameer Gupta
But sorry, come again. Didn’t get that.
J. Samba Murthy
620 tons of bulk fat. Bulk butter has been sold. Yeah.
Sameer Gupta
And any value here?
Srideep Kesavan
Actually the. In terms of. Yeah. While we come back on the value actually in terms of margins we actually improved. The losses declined by about 6 percentage on a quarter to quarter year. On year basis compared to last quarter.
J. Samba Murthy
Yeah. Bulk fat. So the revenue is about 36 crores.
Sameer Gupta
Okay, got it. And the. Just if you can also quantify the loss amount and I understand it is declined by 6% but what is it?
Srideep Kesavan
Yeah, yeah it is. Yep. Just. Just a second. The total loss in fat is about 8.5 crores.
Sameer Gupta
And this is at a gross margin level you’re saying?
Srideep Kesavan
No, these are all PBT level numbers we are talking about. Okay. Gross margin level.
Sameer Gupta
Okay. Okay, got it. I’ll come back in the queue for any follow ups.
J. Samba Murthy
Thanks for listening. Thank you very much.
operator
Thank you. Next question comes from the line of Aniruddha Joshi with ICC Securities. Please go ahead.
Aniruddha Joshi
Yeah, so thanks for the opportunity. Just taking the question from earlier participant forward. So how do we think about the milk procurement prices over next 12 months? Do you see inflationary pressure and hence there will be impact on the margins on a year on year basis or do you see that there is a possibility to maintain the margins? Secondly, the company has taken a small price hike. But as I understand cooperatives have taken price hikes higher than the private sector companies. So is there a potential to raise the prices further to maintain the margins or reduce the impact of inflation in milk procurement prices? That is question number one.
And then secondly, what is the outlook on this Novandi Heritage Novande business now, now it is almost as good as heritage food company. So what happens to the brands like Mami Yoa or Yopob And I guess now we have introduced new brand like a Levo kind of a brand. So whether the earlier brands are discontinued and now a new brand has started. Or. What will be in a way future of this joint venture now. Yeah, that’s it from my side.
Srideep Kesavan
Thank you. Yep, thank you. This is Srideep here. I’ll answer the first part of the question and I’ll hand over to our executive director to address the last question. On milk procurement we are seeing stable milk availability across the regions where we are present. Right. See this is the first thing that you should note. That said, as we speak now we are going through lean period in certain parts of the country, right. As you know that usually August and September are lean months and usually flush availability starts to appear from September, October onwards. All indications because the monsoon actually has been a little too good for our liking.
Actually on the sales side we would have wished it was little less. But on the farm side this is actually going to be impacting very positively in terms of supply of milk is concerned. As far as prices are concerned. There might be some short term increases. We are expecting at this point in time a little bit of increases but nothing extraordinary. See we should understand that 4 percentage or 5% year on year increase in milk prices is normal and it is actually healthy as well. And if you go back about 18 months, the prices had not increased from June of 2023 till about December of 24.
So it was natural that post December there was some price hikes and this 4.74 percentage that we have seen in quarter one is a result of that. So nothing extraordinary. We don’t expect anything extraordinary in the months to come. Predicting up to 12 months is difficult but I can say from here till December we expect milk availability to be decent. The second part of the question was about market prices. As far as we are concerned, our brands are priced at a premium compared to all cooperatives. I don’t think there is any cooperative who is selling at the same price as we do.
And in many cases the cooperative pricing is a catch up on the pricing that we have done. The price increases made by many of the cooperatives in the months of March and April was a catch up to the price increases that we had done already done in the month of December and January. Yes, you’re right. In the normal course of business we may have done one more price increase, let’s say towards the middle or end of quarter one, which we did not do this time because of the sales side pressure because of very, very inclement weather.
And if I can just call out some numbers, if that gives you a sense of the kind of inclement weather that we face on a weighted average basis in the month of May the temperature that we faced in our markets were about 3.5 degrees lower than previous May. And even if I take a 10 year average, it was 2.6 degrees temperature lower. In terms of rainfall, we had 152 millimeters of rain. Cumulatively, if I talk about April and May period, we almost saw about 180 millimeters of rain against 65 millimeters of rain in the previous year, same period.
So this kind of unprecedented weather event we haven’t had in any time in the past. There is no other reason. And the business had bounced back in the month of July, sorry, in the month of June, for example, our overall business growth, revenue growth had bounced back to 15.1% in terms of revenue in the month of June. And value added products also, which had the average number that you’re seeing in quarter one is only 6.6%. 6%. Whereas in the month of June the value added products had grown at 11%. All our products had bounced back by the month of June.
I’ll hand over to our executive director for the question on Mamiyo.
Brahmani Nara
Thank you Sridhi for that answer. Going back to HNFPL, yes, you’re right. Heritage Foods now holds 94.4% shareholding in HNFPL and we’ve been happy to say that we’ve been successfully able to repurpose the business. And HNFPL has already started co packing yogurts for Heritage Foods under the brand name Nav of Levo which is our new sub brand for high energy nutritious products. In fact, I’m quite happy to also share that our R and D team and marketing team very efficiently quickly turned around the project and the initial launch of our yogurts in MRF channels as well as e commerce channels is quite encouraging in terms of off days and it’s a very attractive proposition.
It’s a high protein portfolio of yogurts with different flavors currently available in snackable packs of 90 grams and in the future also available in 400 grams and other SKU sizes. So yes, the company has been repurposed and yogurts continue in the form in the brand of Levo under Heritage Foods driving sales.
Aniruddha Joshi
Okay, so this is very, very helpful. Just one last question. Is the entire inventory of let’s say SMP plus butter accumulated during the milk deflation period is largely over now or is there anything still excess inventory with the company at let’s say June end?
Srideep Kesavan
Thank you. I’ll hand over the question to CEO for this Srideep here. But before I hand over I’ll just indicate one point correction. The S and P did not accumulate. We always during flood season we build up inventory stock and during summertime which is usually the lean period, we consume it. This time because of the value added product sales not happening to our expectation that consumption of S and P did not happen so we did not accumulate. That’s just a correction. And maybe CFO can. Yeah.
A Prabhakara Naidu
Good morning sir. Actually this is Prabhakarana CFO as on the 30th of June we have actually 6197 metric tons of S and P corresponding year. Actually it was actually 4,586 tons. So as Srideep said actually then the consumption slightly it has come down because of that this much of stock we are keeping it going forward. Actually it is going to be consumed in the next Q2 and middle of Q3 also.
Aniruddha Joshi
Okay, sure sir, very helpful. Many thanks.
operator
Thank you. Next question comes from the line of Pratik Kotari with unique pms. Please go ahead.
Pratik Kothari
Yes. Hi, good morning and thank you. So recently at our foundation day, I mean first of all, congratulations to the team for completing 33 years. So in a press release we had this statement during a foundation day about Vision 2030 and being the most admired dairy company backed by clear matrix and milestones. And this was what was mentioned in the press release. If you can just highlight more qualitatively, quantitatively, what is it that we intend to do or what’s the plan that we have until say 2030?
Srideep Kesavan
Thank you Pratik for that question. As you rightly said, the Vision 2030 is to be the most admired dairy nutrition company in the country. There are certain parameters that we have. Number one parameter is to do with the revenue growth. So that’s mostly to do with the size and salience of the business as far as the country dynamic is concerned. With our intention and continuing with our past communication, it’s our intention to keep our growth in the double digit space continuously over the next many years to come, not just next five years. And in the near to short term we are looking at keeping it in the mid teens. That’s our ambition. We also have clearly laid out ambitions in terms of how we want to improve the farmer income in this period.
There are certain metrics that we have drawn out as far as that is concerned. Internally we are in the process of finalizing those numbers. There are certain metrics that we have drawn out in terms of consumer metrics. We are already number one in all our markets as far as consumer loyalty is concerned. In fact we enjoy 19% consumer loyalty in our markets. And this is done through an independent market research agency as part of our routine quarterly brand health track which is the highest among all South Indian brands in our markets. So we plan to enhance it further.
We also have metrics which is related to our customers and partners in terms of in terms of the ratings that we have from them in terms of our net promoter score. These are all parameters that we have for measuring our progress against this. And we also have ambitious targets as far as environment and sustainability is concerned. There are several things that we are working on at this point in time. Anything on the margins, see as far as the margins and shareholder wealth is concerned, that’s primary focus of the company at any cost. And that goes without saying that we are in the process of value added products is just the beginning.
The idea of the business is to constantly shift the narrative towards branded business, branded consumer business which becomes resembles more and more like fmcg. So it’s our intention to transition our margin potential also towards that in that direction. But it is a journey and as far as milestones of 2030 are concerned, it’s a little too early for us to communicate any number.
Pratik Kothari
Fair enough, sure. So coming to this quarter again, anything to call out on the other expense. I mean it seems higher than our past.
Srideep Kesavan
That is right. Only two numbers are higher as far as that is concerned. One, as far as our marketing expenses are concerned, it’s about 7 crore higher then last quarter 1. A bit of it is intentional as well and a bit of it is because of the sales volumes not happening as we expected in the beginning of the quarter. Rather actually end of quarter four we had already gone on air, on television and all with our curd campaign.
This is season three of that and in the middle of quarter one we started our first ever milk brand campaign. I’m sure that you must have seen it, which was focused on driving purity. These campaigns are very essential for us as far as business is concerned because it is essential that we establish our superiority over other brands, including many of the startup brands which have started gaining momentum in some of the organized rates. So the campaigns and we also ran Certain consumer promotions for curd et cetera during the summertime to sustain the volumes. All of this additional cost is about 7 crore rupees.
If I remove that actually on a percentage basis it will be very similar to 9.1 percentage of revenue as similar to last year. And this is one. And number two is freight. We had about 4 crore in absolute terms increase over last year on freight. But there is nothing much to read in that. It is only because the number of kilometers traveled were more and fuel rate changes and all that. So the big story is marketing expenses increased over last year. Q1 which may look in the short term like a hit. But I can tell you that this is what is going to help us build the business over the long term.
Pratik Kothari
Correct. Fair enough. And so last on gross margin. Right. So if even if we Compare Q on EQ, I mean our VAP share is, is higher than what it was in Q4 year on year. I mean it’s, it’s down but it’s, I mean it’s gone from only 37 to 35. Right. So it’s not that material that a gross margin knocks off by 160, 180 basis points. So anything to call out here? I mean is it this bulk because last year I think we didn’t have this much bulk freight loss. Is it bulk fat loss which is kind of driving this or is this something more? Because I mean it’s not that material that VAP has changed quarter on quarter or even year on year.
Srideep Kesavan
Okay, Prateek. No, no. Let me assure you, no it is not the bulk fat loss which others. That is not the, you know if I, if I, if I compare on a quarter on quarter basis. Yes. On absolute number the total fat losses. Now here I’m adding both bulk as well as let’s say consumer fat losses. It’s about 8.5 crores compared to 7.7 crores. But then the volumes revenues have also grown at about 20% plus range. So on a per unit basis or a percentage basis the profitability or the losses in fats have reduced by 6%.
So no, there is nothing to read into this. The only difference is the value added products decline compared to numbers. And here I’m talking standalone numbers because the numbers you called out at 35 percentage is on the consolidated number. But if I call out the value added products excluding fats to our standalone number it stands at about 36.1% compared to 37.5 percentage in same quarter last year. And imagine that we are staking our Value added product contribution 2% or 3 percentage year on year. So ideally we should have been at 39% or something. So that 3 percentage swing is a big one, if I can tell.
So it’s not just the direct contributions that are driven by value added products. That kind of absolute loss of volumes also impact our, let’s say cost absorption of our plant and operating expenses and all of that. So it is the only element, there is no other element at all. And we have done all sorts of analysis. So if I could just break up, for your information, we can break it down into two parts. One is we had, if suppose value added products revenue had happened as we expected, let’s say, or the mix of value added products continued at 1516 percentage growth as we were having in the last several quarters, then our overall net revenue would have been better by about 0.8%.
Similarly, if we had gained the volumes, which is a mix change, that itself would have been about 1.3%. The total impact is about 2.1 percentage on a revenue basis itself. So nothing more than that. I think that we have already recovered half of that in the month of June. These are quarterly averages I’m talking about. And July onwards we should be getting normalized on this.
Pratik Kothari
So point completely taken on the cost and at the EBITDA level. And hence my question was at the gross margin level because this swing, I understand we were to have 2% higher, we came in 2% lower and hence this swing at EBITDA level.
But this kind of doesn’t explain the 160, 180 basis point knock that we took on the gross margin level. That was the only question which I had.
Srideep Kesavan
You know, everything is even gross margin, please understand, is a function of volumes. So among all of those we actually have a very good news to share. Despite such inclement weather, for the very first time in quarter one we crossed on a quarterly basis 510 tons per day. On curd, this is the first time we crossed 500 tons. Last year, same time we were knocking on the doors of 500 tons with 494 tons per day sail.
This year we crossed 510 tons. So I’m saying that even in the face of all of this we were able to grow volumes and do this. But imagine if he had done 550 tons or 560 tons or something, which is what is intended, the cost absorptions would be so much more better. Right? That is what will deliver the gross margins as well.
Pratik Kothari
No, fair enough. Great, thank you. And all the best.
operator
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of with Motilal osol Financial Services Ltd. Please go in.
Shirish Pardeshi
Good afternoon Mr. Rav Srijit. Thanks for the opportunity. Just one quick question on the Nuandi business. Now obviously we have consolidated. So in the 1137 crore revenue what we have reported, what is the contribution? And I have little more and little more understanding how we want to scale up this business over next two to three years in terms of distribution, product and reach. So maybe you can give the current status.
Sambasiva Rao
The contribution will not be visible because this changeover happened in the last part of the quarter. A week before the end of the quarter only the business started in Heritage Foods. So it’s virtually nil contribution. The changeover happened towards the last week of June month. So therefore there won’t be anything visible to you in this coming to the future. Yes, this new brand Heritage Levo sub brand Levo high protein yogurt. We just started placing in the market. So we want to build at least 2 tons kind of volume per day in the next one year.
Then build up to 10 tons in the next three years. The volume is the most important thing. And the logistics, placement, management etc will be done by Heritage Foods sales team. All the logistics advantages we see because they move along with the Heritage products. There’s no independent sub, cold chain or independent delivery mechanisms required. Unlike when we were doing Mommy Yova. That was done as an independent business. Now it is getting integrated into Heritage value added products basket. So it would give us additional item in our WAP portfolio and it will help us to reach more and more consumers who need it.
The placements will be along with Heritage other value added products in all the stores, in all the channels, et cetera. But actual numbers, projection, etc maybe in course of time we’ll be able to articulate better maybe a two, three quarters down the line.
Shirish Pardeshi
Thank you, that’s really helpful. Mr. Rao, I. What I was just wanting to say that you want the part of the business now getting merged. So obviously there is a distribution scale up. So specifically what is the Heritage part of the business? Distribution can catch up. Will we reach a 50 level for the one day business in next six months, one year or it is still the merger will happen and then they will merge the front end and then we will start distribution.
Brahmani Nara
No, no. Distribution is already going on through Heritage’s sales team. So that synergy is already realized with Heritage’s sales team and even operations. While the existing Team runs operations. It’s overseen by the Heritage Operations team. So. So for all practical purposes, all logistics, sales as well as operational synergies have been realized from the get go.
operator
Thank you, Mr. Pardesi. Please rejoin the queue for more questions. Next question comes from the line of Resham Mehta with Greenh. Well, please go ahead.
Resha Mehta
Hello. Morning. I hope I’m audible.
Brahmani Nara
Yes.
Resha Mehta
Yeah. So you know, while you all have spoken about the milk procurement size and the fact that they are still elevated, this is quantitative or qualitative flavor in terms of the milk prices, you know, currently in July, the trend basically versus let’s say the weighted average price that we saw as 43.3 rupees in Q1. And the reason I’m asking this is because, see, while in south, which is our major procurement hub, there is a flush, you know, that we would have seen an early flush because of the unseasonal rain and the, you know, parts. Well, where we are hinting at that in July, August, the prices would be elevated.
Where there’s still lean season, that would largely be the north where our procurement is, you know, relatively lower. So just wanted to understand the mint price procurement trend as we are seeing it now and whether it’s lower versus the Q1 and if any quantification is possible, that would be great.
Srideep Kesavan
Yep. So Resha, this is Srideep here. Yeah, we, I don’t know, I don’t want to quantify the elevation of cost. See, we should understand that. Yeah, you’re right. You know, technically you’re right that if you take Pilnade as south of India, then Tamil Nadu flood season starts from the month of May and it usually continues till about November. Yeah, but we are quite diversified in our footprint of procurement. As you know, we have procurement coming from Maharashtra, we have procurement coming from Andhra, where we have certain areas in Andhra and Telangana have got Buffalo contribution.
We still procure about 20% buffalo milk. And we also procure from north India about 4 to 5% of our milk for our North Indian operations. Now these regions, whether it is Maharashtra or buffalo milk regions or North India have got a different dynamic as far as the lean and flush is concerned. And in fact August, September is the time when if you look at as in for us, the cumulative supply scenario actually shrinks to the leanest most. That’s the reason why I said that. But of course there are lots of compensating factors as well. It will all be a function.
The eventual arithmetic will be a function of the weighted averages that we derive. But at this point in time in general, if I can advise milk supply looks good, there might be a temporary small inflation of 50 paise or a rupee or something. Nothing much to read and which should ideally get normalized once let’s say October or November happens. That’s all I meant. I do not want you to put any arithmetic to that.
Resha Mehta
And on the pricing front, so what would so and then specifically for liquid mill, because in VAP I think, you know, since the last 18 to 24 months we’ve had this strategy where we are okay with relatively lower margins in vap, but the idea is to grow the market, grow our market share and that’s why the pricing is relatively on the lower side though we are previous versus the cooperative. But on the liquid mix side, can you just call out that you know what would be the gap basically the pricing gap, you know, which is there and you know, what is the pricing that we can still.
There is room to take so that, you know, we reach our, you know, kind of old gross margin level.
Srideep Kesavan
Yeah, so this is srideep again on liquid milk on a quarter on quarter basis we are sorry, on a. On a year, on year basis we are higher by about 2.9% and on a quarter on quarter basis sequentially we are up by about 1.4%. That said, you’re right, there is still opportunity for pricing and we will be looking at some of those opportunities in the remaining part of the year. For sure. Like someone called out earlier that cooperatives increase their prices in the month of March and April and we have not reacted with a corresponding increase.
At our end that price increase is possible, but at this point in time we believe that the margin similar to see if you look at the EBITDA numbers Also compared to Q4, I’m only calling out sequentially it is lower by about 1.1% in quarter one and they primarily driven by the value added product shrinkage as far as the contribution is concerned. So we are focused on getting that back and we have some pricing opportunities and value added products which we are realizing. We have already realized part of it in Q1 June itself. And if I can just call out certain numbers if it interests you, for example, CURD on a sequential basis.
Quarter on quarter basis. Quarter one revenue realization from CURD was 0.7 percentage lower than in quarter four, but it is 0.3 percentage higher than quarter one same period last year. So my first priority would be to get CURD back, which is already doing very well to get the revenue back up 3, 3.5 percentage over last year on a year on year basis. So the opportunities are still there in value added products. And after that we can look at milk revenue realization.
operator
Thank you Ms. Mehta, please rejoin the queue for more questions. Next question comes from the line of Kiran Kumar with green investors. Please go ahead.
Kiran Kumar
On this book set of members my. Question is more into numbers. So can you know the breakup of the pad products revenue which we quarterly 1crores out of this from the last conversation we put gather that around 36 crores each from butter and the remaining. Can we assume it is SMP or.
Sambasiva Rao
Can you repeat? We couldn’t hear you properly.
Kiran Kumar
Actually.
Sambasiva Rao
Can you repeat?
Kiran Kumar
Yeah, yeah, yeah, yeah, yeah. As it is evident from the investor presentation the fat products revenue is around 81 crores. Right. So what is the breakup of that? Like what is what amount is for butter and what is for SMP?
Sambasiva Rao
Okay, not SMP. Consumer pack. You can expand. Yeah, breakup of 91 crores. It doesn’t include SMP. Fat products are basically butter, ghee and cream. Maybe you can explain. Yeah, this in that bulk bulk fat sale is 36 crores around and consumer. Pack fat is about 50 crores.
Kiran Kumar
Coming to curd. What is the revenue of curd in WAP or to what extent Kurt is there 26 and 25.
Srideep Kesavan
Request you to repeat your question because your voice is not very clear. Then it is.
Kiran Kumar
Yeah. So what is the revenue of curd in 26Q1.
Srideep Kesavan
Sorry, come again?
Kiran Kumar
Curve revenue in 26Q1 in.
Srideep Kesavan
In absolute it is what close to about 280 crores is curd.
Kiran Kumar
Yeah, this is 25.
Srideep Kesavan
2025.
Kiran Kumar
Yeah, yeah, yeah.
Srideep Kesavan
Sorry, I did not understand. Yeah, same period is about 260. Yeah. 265 crores.
Kiran Kumar
265 crores.
operator
Thank you Mr. Kumar. Please rejoin the queue for more questions. Next question comes from the line of Harsha Shah with Merisis advisors. Please go ahead.
Harsh Shah
Good morning everyone. My question is related to more of a strategy thing because more and more. Population in India has started becoming lactose intolerant. So any plan or any future strategy. Of coming up with lactose women because. Their competitors are also coming up with. Lactose free kind of do we have. That in cards or how is it going to be?
Srideep Kesavan
Yeah, thank you for that question. See one of the reasons why we see. Could you please mute yourself? Yeah. See the question was on lactose intolerance. See first of all that’s a largely debatable point about lactose tolerance or intolerance. But let’s Assume that there is certain amount of people, certain number of people who are lactose intolerant. Which is the primary reason why we are seeing great interest and significant consumer traction for our value products. Most of our value add products, if you see, are reduced lactose products. Whether it is curd, buttermilk, anything, any of those products you take, paneer, etc.
Are all lower in terms of lactose. And most of the lactose intolerant people take these fermented products because the lactose presence is negligible. Secondly, in terms of milk itself, we are working on several innovations at this point in time, some of which will address the lactose, you know, reduced lactose or zero lactose propositions as well.
Harsh Shah
Okay. Okay, thank you.Thank you so much.
operator
Thank you. Next question comes from the line of Parambura with Trinitra asset managers. Please go ahead.
Param Vora
Hello. Am I audible? Hello.
operator
Yes sir.
Param Vora
Yeah, so what I want to ask is regarding value added product. So beyond curd and paneer, what specific investment or market penetration strategies are planned for new VIP categories like liver drinkables and upcoming ice cream products drive their growth and ensure that they significantly contribute to the value added product targets?
Srideep Kesavan
Thank you for asking that question. In fact, actually we are one of the most diversified companies as far as value added products are concerned. I’m not aware of any other company in the private space which is as diversified as we are.
We have quite a wide portfolio apart from, let’s say we call it foods, which is kurt and paneer. And apart from that. Could you please be on mute? I can still hear the sound. Yeah, we have quite a wide range of drinkables starting from our biggest being buttermilk, then flavored milk, lassi milkshakes, cold coffee. Recently we launched a whey based drink called as glucoshakti which is doing exceedingly well for us etc. We are also reasonably well invested in ice creams. Recently we announced a capex of 226 crores on expanding our ice cream facility. Now that ice cream facility, 220 crores in ice cream facility which is supposed to come up towards the end of this calendar year.
The reason why we are making that investment is we are almost fully utilized our existing capacity. So that capacity coming in and our ability to bring out new to the market products is what is going to drive a significant growth in the coming quarters. We also have a small but growing presence in the suite sweet space. Our dupeda is something that is pretty famous in our parts. But last year if you remember, we Launched Laddus. These are Millet Laddus we call it under the brand Truly Good. We also have a growing portfolio of Gulab, Jamun, Rasgulla, etc.
So we are pretty diversified. We are investing proportionate to the size of the business in each of these categories to build traction in each of them. And that’s primarily one of the things that we are doing to de seasonalize the business as well.
Param Vora
Okay, thank you.
operator
Thank you. Next question comes from the line of Gopi Nada with PNR investments. Please go ahead.
Unidentified Participant
Hello sir. First question is when it comes to vitamin D fortification, are we doing D2 or D3? Sir.
Brahmani Nara
Actually we’re the first to fortify all of our milk variants with determine both A and D, both absorbable. And. Very good for bone health and calcium absorption etc. And for eye health. Aside from that, we’ve also fortified our flavored milk with vitamin A and D and our yogurts are also very healthy, not just fortified, but also high in protein. So I think fortification is something that. Is going across the board for us. Not just in milk, while we were the first in milk across other value. Added products as well.
Unidentified Participant
Yeah. The second one is when it comes to working capital cycle, working capital days from the last three years it is coming down. Before that it was going up. What are the factors that are affecting so much and how will it going to be?
A Prabhakara Naidu
Good morning sir. Actually this is Prabhakar, CFO as on 30th June actually for the first quarter ending the working capital cycle days are. 19 days. Inventory 35 days, trade receivable 3 days and trade payable 17 days. So 19 days corresponding year. It was actually 31st March was 20 days. One day it has come down. We will be maintaining around less than 20 days on the working capital cycle.
Brahmani Nara
I mean most of our products are fresh in nature. Most of our value added products are also, you know, very fresh in nature and we do B2C business. We are focused on that. So inventory holding is very efficient for us in general and we are not into any kind of speculative. So we intend to maintain our working capital days under 20 days.
operator
Thank you Mr. Gopinatha. Please rejoin the queue for more questions. Next question comes from the line of Rahil with Crown capital. Please go ahead.
Rahil Shah
Hi sir, Good morning. So just one question. If you could, you know, give us an outlook for FY26 when it comes to your revenue growth and EBITDA margins. What are your expectations in near term?
Srideep Kesavan
Yep, this is sudeep here. We usually don’t give out guidance or outlook. But as I mentioned, we were on a journey to grow in good strong double digits. So we were expecting growth in terms of mid teens. I think we have lost at least 5 or 6 percentage points thanks to the weather that we saw in quarter one. So I hope that everything is normalized. It’s already normalized but I hope that it holds good in Q2, Q3 and all of that. And we are able to be back at about 1516 percentage kind of revenue growth and value added product growing close to about 20%.
That’s what we have been doing and we hope to continue to do that. And the margins and all, at least a percentage correction is expected assuming all goes well.
Rahil Shah
Okay. And what is your validated products contribution. As of now overall to the revenue.
Srideep Kesavan
In the first quarter on standalone basis it was 36.1%.
operator
Thank you Mr. Raheel. Please rejoin the queue for more questions. Next question comes from the line of Pawan Kaware with Nayan Mbala Securities Private Limited. Please go ahead.
Pavan Kaware
I’m audible. Hello.
Brahmani Nara
Yes.
Pavan Kaware
So my firstly congratulations on continued double digit course and my question was also on a growth number. So if you can quantify our regional growth on waste north and south like in home market on quarter year, on year basis for this quarter and in the last quarters.
Srideep Kesavan
Yeah, so we won’t have those numbers ready. But I can tell you that actually south has actually been very under a lot of stress. The rains that or rather actually the whole dip in temperature and everything has been more in the south as west and north have performed relatively much better.
Yeah. So you could say about like you know, western western north continue to perform. Except in the month of June there were lots of rains in the west and north but nothing much in terms of like if I look at this delta between last year quarter one and this year quarter one, western north had more comparable weather and their performance was very good. In south is where we got really severely affected as far as the growth is concerned.
Pavan Kaware
Thank you.
operator
Thank you. Next question comes from the line of Lakshmi Narayanan with Tunga Investments. Please go ahead.
Lakshminarayanan
I have two broad questions. One is want to understand what is. The loss of Norwindi in Q1. And the second question is related to procurement. So procurement I’d like to understand what. Is your procurement mix across the states. You give that north India is around 4,5% of the procurement. I just want to understand, you know. Other states mix across and within procurement. I also want to understand, I mean how with respect to cooperatives, what is Your pricing do you price how many rupees ahead of cooperatives and and within procurement again where do you procure directly from the farmers that you pay the farmers immediately the same day and how much you actually indirectly procure by way of some middlemen. So these are the questions related to. Procurement and the loss in Novandi.
Sambasiva Rao
Thank you. The loss from Norandi foods for the Q1 was 1.31 crores which is booked in that company consolidated in Heritage Foods.
Lakshminarayanan
Because last year, full year I saw the loss of almost 24 crores or something. I’m not wrong as per the annual report. So just wanted to understand whether that. Is.
Sambasiva Rao
That was including some impairment. Value. One time inclusion in the last year. This year Q1 is 1.31 crores operational losses.
operator
Thank you ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Dr. Rao for closing comments.
Sambasiva Rao
Thank you very much for your.
Srideep Kesavan
Okay. There was a question on the procurements of this Sridheep here. Just quickly address. We procure across many states. We procure in Tamil Nadu, Andhra, Telangana, Karnataka, Odisha, Maharashtra and again in the north in Rajasthan and Punjab. So we are pretty widespread as far as our procurement is concerned. There’s no one significant domination. We procure north is about 4% of our total milk rest of the areas. It’s all pretty widespread. You can say it’s almost equal everywhere. And as far as your question on pricing is concerned, we price the farmer on a very fair basis which means that we price our pricing to farmer is on par with what is best in that particular region or village.
We don’t pay anything excessive compared to any of our competition. We pay on par.
Sambasiva Rao
Yeah, I’m sure this answers the question. Thank you all the participants very much for your active engagement and very insightful questions and the interaction and looking forward to catch up with you next quarter. All the very best. Thank you.
operator
Thank you on behalf of Heritage Foods Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.