Hatsun Agro’s recent acquisition of Milk Mantra is also contributing to its consolidated numbers. However, the standout factor this quarter has been its gross margin, which has reached a multi-quarter high.
Gross margins at multi quarter highQ4FY24 30.7%
Q1FY25 31.6%
Q2fy25 30.5%
Q3fy25 30%Q4FY25 30%
Q1FY26 32.3%
Across the dairy sector, companies have been highlighting increased milk procurement costs. In response, players such as Amul and Mother Dairy have hiked retail milk prices by ₹1.5 to ₹2.5 per litre. Hatsun has followed suit, aiding its margin performance.
A higher share of value-added products like ghee and butter has also supported margin expansion. As a result, Hatsun Agro posted a 9% year-on-year revenue growth in Q1. Gross margins expanded by 60-70 basis points, leading to a similar 9% rise in EBITDA.
Net profit growth, however, was modest, impacted by higher depreciation and costs related to the Milk Mantra acquisition.
Going forward, the key things to watch will be growth through scaling acquisitions and the continued contribution of value-added products to earnings.
Despite Monday’s rally, the stock remains about 24% below its 52-week high and is down nearly 18% over the past year.
