Heritage Food Cuts Dairy Product Prices After GST Reform; Shares Rally 11%

Heritage Foods Ltd. has reduced consumer prices to pass on tax benefit of tax benefit of GST rate rationalization, widely dubbed 'GST 2.0,' effective from Sept. 22, 2025. The company's shares rose nearly 11% after announcing that products from milk to cheese will become cheaper.

Heritage Foods has revised prices across several value-added dairy products. The MRP of long shelf-life UHT milk has been reduced by Rs 3 per litre. The dairy brand further added that fresh milk prices have not been changed as the category was exempted from GST from the beginning.

Paneer prices have been slashed by Rs 25 per kg. The prices of butter and cheese will now get cheaper by Rs 50 per kg from Sept. 22. While ghee also got Rs 50 cheaper, Ice cream prices have been cut by Rs 35 per 950 ml pack and Rs 20 off the 700 ml pack.

Mother Dairy has also reduced consumer prices to pass on tax benefit of GST 2.0 to all applicable products, effective Sept. 22, 2025. With the new norms, the company’s entire portfolio now falls either under the exempted or the lowest slab of 5%.

The GST Council, on Sept. 3, approved a rationalisation of GST rates on milk and milk products, bringing tax rates to nil for UHT milk and pre-packaged paneer, and to 5% for items like butter, ghee, cheese, and ice cream.

The GST Council removed the 5% tax on packaged UHT milk under the revised structure.

The stock settled 8.56% higher at Rs 529.90 apiece on the NSE, compared to a 0.37% advance in the benchmark Nifty 50. The shares had earlier during the day risen as much as 10.63% to Rs 540 per share.

Heritage Foods shares have fallen 8.83% in the last 12 months and risen 8.87% year-to-date.

Out of five analysts tracking the company, four maintain a 'buy' rating and one recommends a 'hold', according to Bloomberg data. The average 12-month consensus price target of Rs 571.50 implies an upside of 8.3%.