HFL Eyes Strong Future Despite Market Headwinds

Ashwin Thakker

23 Aug 2025 — 2 min read

HFL achieved its highest ever quarterly profit in Q1 FY'26, with total income growing 15% year-on-year to INR 998 crores.
The company targets a gross block of INR 1,800 crores by FY '27, with potential to reach INR 2,000 crores.
A new North India ice cream facility, costing INR 200 crores, is expected online in Q4 FY'26, aiming to make HFL the largest contract ice cream manufacturer within two years.
Footwear business momentum is strong in H1 FY'26, but H2 faces potential headwinds due to global tariffs affecting multinational clients' sourcing strategies.
HFL is optimistic about achieving targeted Return on Equity (ROE) from FY '27, supported by strategic investments and acquisitions.
Despite seasonal variations and global trade ambiguities, the overall annual outlook for growth remains positive.

Hindustan Foods Limited (HFL) delivered its highest ever quarterly profit in Q1 FY'26, with a 15% revenue jump to INR 998 crores. This strong performance, despite unseasonal rains, underpins the company's positive annual outlook. HFL is strategically expanding, targeting significant capital expenditure, and remains confident in its diversified business model to navigate future challenges and sustain growth momentum.

Ambitious Expansion Fuels Future Outlook

HFL is pursuing an aggressive expansion strategy, particularly in its Ice Cream and Footwear segments. The company aims for a gross block of approximately INR 2,000 crores by FY '27, up from INR 1,500 crores currently. This includes a significant INR 200 crore investment in a new North India ice cream facility, slated for Q4 FY'26 launch. Management stated:

"We believe that we'll be the largest contract manufacturer of ice creams in the country within the next 2 years."

Additionally, INR 50 crores are allocated to the Shoe business, and brownfield expansions are ongoing. This capital deployment emphasizes value-accretive acquisitions and achieving targeted ROE from FY '27.

Resilience Amidst Market Uncertainty

Despite the positive outlook, HFL acknowledges potential headwinds. Unseasonal rains impacted Q1 demand for Ice Creams and Beverages. More notably, the Footwear business, while strong in H1, faces uncertainty in H2 FY'26 due to global tariff situations. CEO Sameer Kothari highlighted the "Butterfly effect" where multinational customers' sourcing changes could indirectly affect domestic demand, even though HFL's production is 100% domestic. However, HFL's diversified product mix, strong client relationships, and dedicated manufacturing model are expected to provide a strong shield against such variability and maintain its growth trajectory.

HFL's Q1 FY'26 success provides a foundation for continued growth. The company's strategic investments in new facilities and capacity expansion, especially in Ice Cream and Footwear, position it for a robust future. While global trade tensions and seasonal variations present challenges, HFL's resilient business model and diversified portfolio offer confidence in achieving its ambitious FY'26 and FY'27 targets.

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