Hindustan Foods Limited: A Recipe for Growth and Diversification in H1 FY26

Hindustan Foods Limited (HFL) has marked a significant milestone in its journey, reporting its first-ever quarter with revenues exceeding INR 1,000 crore. This achievement, alongside robust financial performance in Q2 and H1 FY26, underscores the company's successful transformation and strategic initiatives in the dynamic FMCG contract manufacturing space. The company's consolidated total income for H1 FY26 rose by 16% year-on-year to INR 2,041 crores, with EBITDA growing 17% to INR 173 crores, and Profit After Tax (PAT) increasing by an impressive 33% to INR 67 crores.

This strong performance is a testament to HFL's disciplined execution and strategic diversification across various product categories. Over the last four years, the company has expanded into new segments such as foods and beverages, ice creams, healthcare, and footwear. This diversification, coupled with the addition of new-age brands and continued partnerships with larger FMCG incumbents, has positioned HFL advantageously within the evolving FMCG ecosystem. The company's aggressive M&A policy, described as a 'string of pearls strategy,' has also been instrumental in building new capabilities and expanding its market reach, with over 10 acquisitions completed in the past four years.

Strategic Investments and Operational Highlights

HFL's growth is underpinned by significant strategic investments and operational advancements across its business verticals. In the Home & Personal Care segment, the Board has authorized investments totaling INR 120 crores for brownfield expansion in Hyderabad, greenfield expansion in Silvassa, and the acquisition of a new HPC project. These initiatives are set to commercialize by Q1 FY27 and complete by Q4 FY26, respectively, ensuring existing facilities operate at optimum capacity.

The Ice Cream division is also witnessing substantial capex, with INR 20 crores in Sandila, INR 225 crores in Panipat, and INR 60 crores in Nashik. A key backward integration move includes the acquisition of a waffle cone and packing material manufacturing unit for INR 30 crores, equipped with high-speed automatic lines capable of producing 1 million cones per day. This transaction is expected to close and commence production by Q3 FY26, enhancing the company's value chain. The Nashik facility has commenced production and is ramping up, while the Panipat facility is expected to be fully operational by Q1 of the next financial year.

In Food & Beverages, HFL is investing INR 40 crores in a new facility for flavored yogurt, INR 30 crores in a greenfield bottled water plant, and INR 10 crores to boost capacity in Mysuru by 50%. The merger of the Nashik factory for soups and seasonings is anticipated to conclude by Q4 FY26. The Healthcare segment is also expanding with INR 25 crores for wellness products and INR 5 crores to upgrade the Baddi site for a global pharmaceutical company. The Baddi site is further approved for skin care products and medicated lozenges, with production expected to commence from Q1 FY27 to Q4 FY26 across various projects.

Financial Prudence and Future Outlook

Mayank Samdani, Group CFO, emphasized the company's robust financial health, highlighting cash and cash equivalents of INR 162 crores and a net debt-to-equity ratio of 0.67 as of September 30, 2025. Net cash flow from operations stood at approximately INR 109 crores. This strong financial position, supported by healthy internal accruals and ample headroom for additional debt, fully equips HFL to fund its planned INR 550 crores of capex. Management remains confident in sustaining this momentum, focusing on long-term value creation through disciplined financial management.

Sustainability and Strategic Vision

HFL is also deepening its commitment to sustainability. Initiatives include transitioning to green power from a Group Captive Solar source, installing Bio-briquette based boilers to replace Diesel, and commencing the use of recycled plastic bottles in Piparia. These efforts align with the company's broader vision of responsible growth and operational excellence.

Sameer R. Kothari, Managing Director, reiterated the company's focus on unlocking the full potential of each business vertical through well-defined strategic roadmaps. He expressed confidence that every division within Hindustan Foods has the opportunity to grow manifold and contribute meaningfully to its long-term vision. The company's ability to sustain growth while maintaining operational rigor and adapting to the evolving FMCG market dynamics defines its performance, ensuring enduring value through consistency and operational excellence.