The ice cream story played out similarly. “We set up the ice cream facility about three years ago. Again, electrification and climate change led to a tremendous increase in the overall ice cream market,” adding that HFL will set up two more ice cream factories.

HFL says the ice cream sector is undergoing multiple structural changes with the advent of quick commerce. For instance, ice cream is becoming an all-weather snack. Plus, more PE funding is coming to startups in the space. Another trend, says HFL, is niche product propositions — think flavoured or sugar-free ice cream.

HFL is also looking at backward integration to enhance revenue share from the vertical. “We are looking to build an ice cream stick plant, which will supply the sticks to ice cream makers,” says Manoj Patani, president, ice cream business.

Diversification into shoes and wellness has also rewarded HFL well. “Because of the developments on the tariff front, we believe there could be a phenomenal potential to increase the contract manufacturing business in shoes,” says Kothari. Since the work is labour-intensive, tech and automation cannot substitute for this. “Any kind of shift from China, Vietnam, and even Bangladesh should benefit India,” he says.

In fact, active participation across segments cushions HFL from cyclical risks and leads to a diversified revenue stream. “We do not expect everything to do well at the same time. Nor do we expect everything to go down at the same time… [this] ensures that we have a steady stream of revenue,” says Sanjay Sehgal, president, healthcare & wellness.

De-risking is, in fact, the core philosophy of the management. “The emphasis on de-risking has been ingrained in our company. We have looked at de-risking by way of locations, customers, and product categories, as even when product categories are the same, consumer behaviour changes very quickly,” says Kothari.

HFL believes the model of decentralised operations — having multiple factories across the country — works well in India, as it enables one to hedge one’s bets. And while it is too early to assess the impact of the tariff war, HFL says opportunities exist. For instance, besides footwear, there is a big opportunity in the beauty and FMCG space. HFL expects its customers, especially in Europe and the U.S., to realign their supply chains. But there are challenges. “The… entire ecosystem needs to be developed, including packaging, graphics, decoration... this will take a year or so, but I think you will see some action coming into the beauty segment in terms of more personal care products getting exported from India,” says Kothari.

HFL, with its diversified portfolio and revenue mix, has strategically placed itself in a position of strength, as is evident from the numbers that it has been posting over the past couple of years. The bets on new product offerings have paid off in the past, and the future growth visibility looks intact even in testing times like these.

Rank 18

Can Hindustan Foods outpace the FMCG slump with its de-risked growth model?