Thread by @TYMFinance

Heritage Foods conducted the conference call for Q3 FY22:

Here are the concall highlights
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Business Updates:

• Cash & Bank Balance stood 66.1 cr with debt free status.
• Milk Procurement: 1.2 Million Lit per day (1.1Mil Lit last year Q3)
• Avg Milk Sales: 1.04Mil Lit per day vs 0.98 Mil Lit Q3FY21.
• Curd Sales: 271 Metric Ton
• Value Added Product: 164cr sales

Margins:

• Margin drop was was because of increase milk procurement price & the price was not passed on. However prices has been passed in Q4.
• Raw Material price has been increased in cattle field as well, which will passed in Q4.

Milk:

• Average Procurement Price of Milk: 38.30Rs. Mgmt expect this increase in price to be correction (previously ~35Rs)
• Procurement prices has risen a lot, which is now gradually passed to customer.
• On average 2 Rs per litre price rise has been taken.

Value Added Product:

• Curd share of revenue is increasing contributing 20-21%.
• Ghee is the 2nd highest contributor in value added product.
• Mgmt expects Value Added Product share to continue increase the market share.
• Mgmt aims to improve the supply chain for customer.

Strategy:

• Focus remain to increase the availability for value added products.
• Go-To-Market Strategy remains increasing the distributors (currently at 300+).
• Expanding in neighborhood distribution stores & expanding in e-commerce & quick commerce is step taken.

Focus:

• Currently Valued added Product contributes 23-25% and mgmt internally are focusing on increasing it to 35-40% in next 3 years.
• Expanding the business with asset-light model, even with dairy & non dairy business.

Non Dairy Products:

• Launch will be after few days.
• However this venture is in line with the exiting business expansion.
• Bur for next 3 years this segment would not be a meaningful contribution.

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