Upside likely capped for this multibagger dairy stock; here’s why
The multibagger stock, which is up 102 per cent in two years and 175 per cent in three years, has delivered a negative return of 4 per cent in the past one year, in line with the BSE FMCG index.
- Dec 3, 2025,
- Updated Dec 3, 2025 12:09 PM IST
Heritage Foods is aiming to become a full-fledged FMCG player, rather than just a dairy company; and the company management recently reiterated its intent on investing to build capital assets, brand and distribution network without impacting the company’s financial metrics. But, for now, ICICI Securities maintained its 'Hold' rating on the stock, modelling in a near-term earnings impact led by inflation in milk procurement prices.
The brokerage suggested a target price of Rs 475, valuing the stock at 15 times estimated FY28 earnings per share. The multibagger stock, which is up 102 per cent in two years and 175 per cent in three years, has delivered a negative return of 4 per cent in the past one year, in line with the BSE FMCG index. On Wednesday, the scrip was trading at Rs 480.85 apiece, higher than ICICI's target price.
ICICI Securities said Heritage’s strategy laid out four simple imperatives. They include driving balanced growth across key categories, reducing earnings volatility by increasing net revenue per litre faster than opex and improving farmer income and productivity. It also eyes establishing leadership in core markets.
"We reckon that SOAP provides a clear blueprint that links procurement strength, brand building and financial discipline," ICICI Securities said.
The brokerage said Heritage is aiming to reach 6,00,000-plus retail outlets and 3 crore consumer base by 2030 through omni-channel execution. The company is looking towards increasing revenue by 15–16 per cent CAGR, supported by 9–10 per cent volume growth and higher net revenue per litre. VAP (ex-fats) contribution should rise to 45 per cent by FY30.
It believes the KPIs provide visibility on steady top-line growth.
ICICI Securities said the margin gain will likely stem from automation, mega-hubs, and better supply chain efficiencies.
The Heritage management expects opex, as a share of revenue, to fall by 1 per cent by FY30 driven by better utilisation and ICICI Securities expects the execution on these levers should drive gradual margin expansion.
"We model Heritage to report revenue/PAT CAGRs of 11.9 per cent/22.5 per cent over FY25–28E and RoCE to remain strong (CoC) over FY25–28E. Maintain HOLD with a DCF-based target of Rs 475 (implied target P/E of 15x FY28E EPS," ICICI Securities said.
Heritage Foods is aiming to become a full-fledged FMCG player, rather than just a dairy company; and the company management recently reiterated its intent on investing to build capital assets, brand and distribution network without impacting the company’s financial metrics. But, for now, ICICI Securities maintained its 'Hold' rating on the stock, modelling in a near-term earnings impact led by inflation in milk procurement prices.
The brokerage suggested a target price of Rs 475, valuing the stock at 15 times estimated FY28 earnings per share. The multibagger stock, which is up 102 per cent in two years and 175 per cent in three years, has delivered a negative return of 4 per cent in the past one year, in line with the BSE FMCG index. On Wednesday, the scrip was trading at Rs 480.85 apiece, higher than ICICI's target price.
ICICI Securities said Heritage’s strategy laid out four simple imperatives. They include driving balanced growth across key categories, reducing earnings volatility by increasing net revenue per litre faster than opex and improving farmer income and productivity. It also eyes establishing leadership in core markets.
"We reckon that SOAP provides a clear blueprint that links procurement strength, brand building and financial discipline," ICICI Securities said.
The brokerage said Heritage is aiming to reach 6,00,000-plus retail outlets and 3 crore consumer base by 2030 through omni-channel execution. The company is looking towards increasing revenue by 15–16 per cent CAGR, supported by 9–10 per cent volume growth and higher net revenue per litre. VAP (ex-fats) contribution should rise to 45 per cent by FY30.
It believes the KPIs provide visibility on steady top-line growth.
ICICI Securities said the margin gain will likely stem from automation, mega-hubs, and better supply chain efficiencies.
The Heritage management expects opex, as a share of revenue, to fall by 1 per cent by FY30 driven by better utilisation and ICICI Securities expects the execution on these levers should drive gradual margin expansion.
"We model Heritage to report revenue/PAT CAGRs of 11.9 per cent/22.5 per cent over FY25–28E and RoCE to remain strong (CoC) over FY25–28E. Maintain HOLD with a DCF-based target of Rs 475 (implied target P/E of 15x FY28E EPS," ICICI Securities said.