Hatsun Agro Product is aiming for a 50% revenue increase over two years, targeting up to 150 billion rupees by fiscal 2028. Supported by a 10 billion rupee expansion plan, the company is pushing beyond its southern India stronghold. Investors are balancing this growth ambition against margin pressure from rising procurement costs and intense industry competition.
Hatsun Agro Product has set an ambitious goal to grow its annual revenue by 50% over the next two years. By the end of fiscal year 2028, the company aims to reach between 140 billion and 150 billion rupees. This follows a strong performance in fiscal 2026, where the company recorded revenues of nearly 100 billion rupees, marking a 14.5% year-on-year growth.
The core of this strategy involves shifting the company from a regional player with a strong base in southern India to a national brand. Management has already initiated sales operations in major western markets like Mumbai and Pune. To support this, the company plans to scale its daily milk procurement to 5 million litres, up from the current 4.3 million litres. The firm has earmarked 10 billion rupees for capital spending in the current financial year, focusing on optimizing existing manufacturing sites rather than building new ones, and strengthening its procurement network across 13,000 locations.
A significant positive for the company's balance sheet has been its focus on debt management. The company has successfully reduced its debt-to-equity ratio from 1.44 in fiscal 2024 to 0.68 by fiscal 2026, providing a healthier financial foundation for its expansion plans.
Despite the growth narrative, investors are watching the impact of rising input costs on profitability. The dairy sector is currently facing pressure from higher milk procurement prices, which have climbed by 20% to 22% over the last 15 months. This rise is primarily driven by the increasing cost of animal feed and milk fat. These higher expenses squeeze profit margins, and the intensely competitive nature of the dairy industry limits the company's ability to pass these costs on to consumers through price hikes.
Moving forward, the primary monitorables for investors include the pace of the national expansion and the company's ability to protect its profit margins amidst inflationary pressure. Success will depend on how effectively the company can balance its aggressive volume growth with stable operational efficiency, particularly as it navigates the competitive landscapes of North and West India.