Heritage Foods Ltd (HFL) upcoming ice cream manufacturing facility in Shamirpet, Hyderabad is on track for commercial commissioning in a month or two, with trial production currently underway, said its CEO Srideep Kesavan.
According to him, the flavoured milk plant at the location is also expected to be commissioned during the current quarter, strengthening the company’s presence in fast-growing value-added dairy segments.
“In line with our earlier guidance, trial runs are on and we are now awaiting the commercial production date. The project is progressing as planned,” he said during an investor call.
In the first year of operations, the ice cream plant is expected to operate at around 40–45% capacity utilisation, in line with the company’s business plan.
“We are budgeting about 40% utilisation in year one. We do not expect any surprises unless the summer season turns unfavourable and impacts ice cream demand,” the management said.
Ice cream continues to be a key growth driver for HFL. The segment recorded about 21% year-on-year growth in the December quarter, up from 16–17% growth in the preceding quarter, as volumes and value continued to scale.
Value-added thrust
Besides ice cream, the company has been making incremental capital investments in value-added dairy categories such as curd, paneer, buttermilk, flavoured milk and ghee to maintain high plant utilisation.
Curd remains a core focus area, with annual investments ensuring utilisation levels of around 90%. Paneer posted nearly 30% growth during the quarter, reflecting strong demand. Additional capital expenditure in select categories is planned, with commissioning expected in the second or third quarter of the next financial year.
HFL said it remains focused on deepening its presence in core markets, citing significant headroom for growth in packaged dairy. Packaged curd penetration in Andhra Pradesh is estimated at about 25%, while in Hyderabad city it is around 40%.
Improving cold-chain infrastructure has enabled wider distribution, with a growing number of neighbourhood retail outlets now stocking value-added dairy products.
Revenue potential
At full maturity, the Hyderabad ice cream plant has the potential to generate ₹500–600 crore in annual revenue over six to seven years. Ice cream revenues for the current year are expected to be around ₹110 crore.
Flavoured milk is also seen as a high-potential category, with revenue potential of up to ₹120 crore. The company expects to cross the ₹100-crore revenue mark in flavoured milk within four to five years.