Procurement prices likely to soften in the next 5-6 months: Heritage Foods CEO Srideep Kesavan

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Heritage Foods Limited She said she is confident of achieving the target of becoming a Rs 6,000 crore company in the next three years.

“We set a target to become a company with a revenue of Rs 6,000 crore around five years ago. But unfortunately, the pandemic hit us. It affected not only our business but many companies across the country. Said Srideep Kesavan, CEO, Heritage. Foods, “There was a few years of slowdown after that.” business line On the sidelines Cupcake food held here recently.

The 30-year-old dairy company, which has a presence in 11 countries, recorded an income of ₹2,423 crore for the ninth month period ended 31st December 2022, as against ₹2,681 crore for the full year 2021-22. In the 2019-2020 financial year, the company recorded an income of Rs. 2,726 crore.

Kezavan said, “After slowing down, for the past six to seven quarters, we have been consistently recording 20 per cent growth returns. We have kept that momentum going. The top line is growing strongly and we will be able to achieve a turnover of Rs 6,000 crore within three years.”

purchase costs

Asked about his comments on the escalating cost of procurement and how it affects the company, Kesavan said, “We started seeing the increase in December 2021. Since the beginning of 2022, there has been no stopping at all. Prices have been going up almost every month. In the last financial year alone, they have gone up.” Procurement costs for us by at least 15 percent.”

“Over the past month or so, the price increase momentum has slowed,” he added.

Casavan further noted that they are “hopeful that the current momentum of rural milk production will continue”. “We are confident that in the next five to six months, we will see prices come down and it will be good for all dairy companies,” he said.

Dissociation of milk and non-milk proceeds

Asked about the contribution of revenue from the product sectors, Kesavan said that milk contributed about 63 percent, two percentage points from animal feed trade, and 34-35 percent from value-added products.

“We divide the segment of value-added products into fats (butter and margarine) and other value-added products because of the previous margin profile. “We’re going to be close to about 30 percent value-added products and about 4 to 5 percent fat,” he said.

Asked if more and more dairy companies expanding into their non-core areas will put pressure on margin, Kesavan said, “Heritage has been operating in multiple countries for a long time. Many of our non-core markets are as profitable as our core markets. It is a matter of finding the right business model. I don’t really see any challenge because operating in a different state will have a different profitability proposition compared to the home state.”