1. At a Glance
Hindustan Foods (HFL) is the behind-the-scenes stunt double of the FMCG world — manufacturing your favourite snacks, soaps, and shampoos, but never getting star credit on the packaging. Once a single-brand struggler making Farex baby food, it got acquired by Vanity Case Group in 2013 and turned into a multi-client, multi-category manufacturing powerhouse. FY25 saw ₹3,691 Cr revenue, ₹300 Cr EBITDA, and ₹114 Cr PAT — all with zero dividend payouts, because apparently, the company believes in reinvesting… or just doesn’t want you to get used to pocket money.
2. Introduction
FMCG brands love the spotlight, but guess who’s sweating backstage? HFL. It’s like the guy who plays the guitar for a pop singer — critical to the show, invisible to the audience. They run plants that churn out everything from biscuits to detergents for big-name FMCG giants. And they do it at scale — 20+ factories across India.
Growth has been relentless — 38% profit CAGR over 5 years — but it’s been fuelled by debt and aggressive capex, turning cash flows into a mirage. The stock trades at a nosebleed 55× earnings, so Mr. Market clearly thinks HFL is the next Foxconn for Indian FMCG. Whether that plays out… well, that’s why you’re here.
3. Business Model (WTF Do They Even Do?)
In short: They make stuff for brands who don’t want to make stuff themselves.
- Categories: Food, beverages, home care, personal
- care, leather shoes & accessories (yes, they even do fashion).
- Clients: Big FMCG names (confidential contracts).
- Revenue Model: Cost-plus or fixed-margin manufacturing. This means stable margins (8% OPM now), but not insane pricing power.
The beauty? FMCG brands avoid capex headaches, HFL gets steady volumes. The curse? No brand moat — they’re replaceable if a competitor underbids.
4. Financials Overview
Q1 FY26:
- Revenue: ₹995 Cr (+15% YoY)
- EBITDA: ₹80 Cr (~8% margin)
- PAT: ₹32 Cr (EPS ₹2.66)
TTM:
- Revenue: ₹3,691 Cr
- EBITDA: ₹300 Cr
- PAT: ₹114 Cr
- EPS: ₹9.72
Fresh P/E Calculation:
Price ₹534 / Annualised EPS (₹2.66 × 4 = ₹10.64) = 50.19
(Screener’s 55× is stale; this is your up-to-date reality.)
Comment: Growth remains double-digit, margins stable, but valuations are premium even by FMCG standards — without the brand premium.
5. Valuation
(a) P/E Method:
Peer median P/E (contract manufacturing + FMCG) ~ 35×.
Applying 35–45× to FY26E EPS ₹11.2 → ₹392–₹504.
(b) EV/EBITDA Method:
Debt ₹896
