HATSUN - Hatsun Agro

📊 NSE: HATSUN 🏢 Food - Processing - Indian 📅 Last Updated: 12/13/2025 22:50

💰 Financial Performance

Revenue Growth by Segment

Milk & Milk Products segment accounts for 100% of turnover, which grew 8.9% YoY to INR 8,683 Cr in FY25. H1 FY26 revenue reached INR 5,018 Cr.

Geographic Revenue Split

Tamil Nadu contribution reduced to 55% in FY25 from higher historical levels. Other states including Karnataka, Andhra Pradesh, Telangana, Maharashtra, and Odisha contribute the remaining 45%.

Profitability Margins

Operating margins improved to 11.61% in FY25 from 9.65% in FY23. Net Profit Margin stood at 3.29% in FY25 compared to 3.34% in FY24.

EBITDA Margin

EBITDA margin was 11.6% in FY25 (INR 1,006 Cr). H1 FY26 EBITDA margin surged to 13.8%, representing 196% growth over H1 FY25.

Capital Expenditure

Historical investment in infrastructure such as freezers and cold storage totals approximately INR 1,100 Cr. Acquisition of Milk Mantra Dairy in FY25 cost INR 233 Cr.

Credit Rating & Borrowing

CRISIL AA-/Positive (revised from Stable in June 2025). Total bank loan facilities rated at INR 2,120 Cr. Interest coverage ratio is comfortable at 5.55 times.

⚙️ Operational Drivers

Raw Materials

Raw milk (processed at 40 lakh litres daily) and Skimmed Milk Powder (SMP) are the primary raw materials, with SMP stock reduction being a key driver for working capital efficiency.

Import Sources

Sourced domestically from over 10,000 villages across Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Maharashtra, and Odisha.

Key Suppliers

Procurement is direct from over 5 lakh farmers through a network of 13,000 milk banks.

Capacity Expansion

Current processing capacity exceeds 40 lakh litres of milk daily across 23 factories. Planned expansion includes penetrating the Eastern market (Kolkata) from the Odisha base.

Raw Material Costs

Raw material costs are managed through direct procurement; SMP stock reduction lowered Gross Current Asset (GCA) days from 71 to 51 days in FY25.

Manufacturing Efficiency

ROCE stood at 11-13% over the last three fiscal years ending FY25, supported by high capacity utilization and integrated chilling units.

Logistics & Distribution

Distribution is handled through 4,000+ exclusive own outlets and distribution vessels to maintain a 0.5-day receivable cycle.

📈 Strategic Growth

Expected Growth Rate

15-17.5%

Growth Strategy

Achieving growth through geographic expansion into Maharashtra and Odisha (via the INR 233 Cr Milk Mantra acquisition), scaling the 'Daily Moo' app, and expanding the product portfolio into premium chocolates (Havia) and mid-market chocolates (Hanobar).

Products & Services

Arokya milk, Arun ice creams, Hatsun curd, ghee, butter, Ibaco ice-cream chain, Santosa Cattle Feed, and Havia chocolates.

Brand Portfolio

Arun, Arokya, Hatsun, Ibaco, Santosa, Havia, Hanobar, and Oyalo (discontinued).

New Products/Services

Launched 'Slice It' ice cream range, new kulfi flavors, and fermented dairy products like yoghurt and dairy-based spreads in FY25.

Market Expansion

Expanding global distribution to Singapore, Seychelles, Brunei, Maldives, Mauritius, and UAE (Ajman).

Market Share & Ranking

Largest private sector dairy company in India; leading by more than two times the next private dairy competitor in milk and curd segments.

Strategic Alliances

Acquired Milk Mantra Dairy Private Limited (MMDPL) in January 2025 to anchor Eastern India expansion.

🌍 External Factors

Industry Trends

The dairy industry is growing at 8-10% annually, with a strong shift toward formalization and branded value-added products like curd and ice cream.

Competitive Landscape

Competes with Heritage Foods (7.9% EBITDA margin), Dodla Dairy (10.3%), and Parag Milk (1.6%). Hatsun maintains a superior 11.6% margin.

Competitive Moat

Moat is built on brand equity (three INR 1,000 Cr+ brands) and a massive direct-to-consumer retail network of 4,000+ outlets, which is highly sustainable and difficult for competitors to replicate.

Macro Economic Sensitivity

Sensitive to GST reforms; a cut in GST rates across dairy products is expected to accelerate sector formalization and benefit market leaders.

Consumer Behavior

Increasing preference for branded and packaged curd among working women, making curd the second-largest revenue source.

Geopolitical Risks

Trade barriers or regulatory changes in export markets like the UAE or Singapore could impact the global expansion strategy.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with National Standards including ISO 22000, FSSC 22000, and Export Import Certification (EIC).

Environmental Compliance

Committed to replacing electricity with 1,200 units/day of biogas and planting 2,500 trees across plants to meet ESG goals.

Taxation Policy Impact

Beneficiary of GST formalization; potential GST rate cuts on dairy products would further improve competitive positioning against unorganized players.

Legal Contingencies

No material pending court cases or fines related to corruption or conflicts of interest reported for FY25.

⚠️ Risk Analysis

Key Uncertainties

Entry into non-mature markets like Odisha and Maharashtra involves high marketing overheads and intense competition, which could impact short-term profitability by 1-2%.