Hindustan Foods launches ice cream facility in Nashik, targets Rs 30,000cr frozen dessert market

Hindustan Foods Limited has commenced operations at its new ice cream manufacturing facility in Nashik, Maharashtra, marking the beginning of Phase 1 of its entry into India‘s frozen dessert market. The company, a prominent contract manufacturing partner in the FMCG sector, is strategically expanding into categories with strong demand potential. The Nashik facility is expected to play a central role in this transformation by supporting large-scale, multi-brand production in a segment that has historically remained underpenetrated in terms of outsourcing.

The expansion coincides with a consumption upsurge in India’s ice cream market, which has evolved from a seasonal indulgence to a year-round FMCG category. This move reflects Hindustan Foods’ broader push to deepen its portfolio across high-margin, scalable verticals and cement its position as an end-to-end solutions provider for food and beverage clients.

Why Is Hindustan Foods Entering the Ice Cream Business Now?

The ice cream industry in India, valued at ₹30,000 crore and growing at over 15% annually, is undergoing a structural shift. Demand is being driven by urbanisation, higher disposable incomes, and changing consumer preferences, particularly among young and digitally connected consumers. The widespread adoption of quick commerce platforms and hyperlocal food delivery systems has made frozen desserts more accessible across demographic segments and geographical locations.

Manoj Patani, President of Hindustan Foods’ Ice Cream Division, said the company is witnessing robust demand heading into the peak summer season. He added that the facility would serve both established and emerging brands, enabling customised product development, rapid scale-up, and category-specific innovation in flavours, formats, and packaging.

How Does the New Facility Support Hindustan Foods’ Strategic Growth?

The Nashik plant represents Hindustan Foods’ continued evolution from a category-specific manufacturer to a multi-vertical FMCG solutions provider. Since its acquisition by the Vanity Case Group in 2013, the company has significantly broadened its operational scope to include food and beverages, home care, personal care, health and wellness, footwear, and household insecticides. With each expansion, the company has followed a formula of asset-light investments, backward integration, and shared manufacturing platforms that optimise costs for clients while preserving quality standards.

This facility is designed to offer both scale and flexibility. It can manufacture a wide variety of SKUs, adapt to seasonal shifts, and accommodate new product launches. In addition, Hindustan Foods is integrating upstream sourcing and packaging operations into the ice cream division to improve margin control and ensure seamless delivery from manufacturing floor to distribution shelf.

What Is the Ice Cream Industry’s Appetite for Contract Manufacturing?

The Indian ice cream industry has traditionally relied on captive manufacturing due to its perishability, cold-chain complexity, and stringent food safety requirements. However, the operating dynamics have started to shift. The rise of direct-to-consumer frozen food startups, regional flavour customisation, and digital distribution networks has increased the demand for agile, outsourced manufacturing solutions.

Hindustan Foods is responding to this demand by developing a facility that addresses key bottlenecks in frozen dessert production, including hygiene compliance, shelf-life management, and flavour consistency. Its ability to offer scalable manufacturing with quality certifications, packaging services, and cold-chain coordination makes it an attractive partner for brands looking to expand without incurring heavy capex.

As a Government-recognised Two Star Export House, the company also has the option to export to global markets, especially in regions with large South Asian populations. This could help Indian frozen dessert brands reach diaspora communities in the Middle East, Africa, and Southeast Asia.

What Is Driving Stock Market Sentiment for Hindustan Foods?

Hindustan Foods Limited, traded under the symbol HNDFDS on the National Stock Exchange and Scrip Code 519126 on the BSE, has shown consistent stock performance in the lead-up to the facility’s launch. As of early May 2025, the stock is trading in the ₹400 to ₹420 range. While the announcement has not resulted in an immediate price surge, analysts interpret this as steady investor confidence in the company’s long-term strategic clarity and execution track record.

The absence of speculative volatility around the stock points to growing institutional comfort with Hindustan Foods’ business model, especially as it expands into less saturated, yet fast-growing FMCG categories. Shareholder interest appears to be shifting from quarterly results to multi-year growth projections, particularly around food processing and cold-chain-enabled categories.

What Are Brokerages Saying About HFL’s Prospects?

Brokerage firms continue to rate Hindustan Foods in the Hold to Accumulate range, driven by its solid fundamentals, strong promoter backing, and long-term contract visibility. The stock currently trades at a trailing P/E of around 26x, which is viewed as fair in comparison to peers like Amber Enterprises in appliances and Syngene International in pharmaceuticals.

Analysts cite the company’s multi-client, multi-category model as a competitive advantage in an FMCG landscape increasingly moving toward outsourced manufacturing. Key catalysts for re-rating include faster-than-expected ramp-up of the Nashik plant, new client additions in the frozen segment, and sustained margin expansion through backward integration.

However, they also point to monitoring points such as working capital intensity, execution speed at the new facility, and the seasonal volatility of ice cream demand.

What Do Institutional Flows and FII/DII Trends Indicate?

Institutional investor interest in Hindustan Foods has increased gradually over the last two quarters. Domestic mutual funds and portfolio managers have built moderate positions in anticipation of strong FY26 revenue growth. FII activity, however, has remained neutral, with foreign funds largely adopting a wait-and-watch approach amid global uncertainty and cautious risk allocation in the Indian midcap space.

The promoter group, Vanity Case, continues to maintain a dominant holding in the company with no pledging or equity dilution, a factor that enhances governance credibility. Retail sentiment on investment platforms is constructive, with many long-term investors tracking plant ramp-up timelines and client onboarding announcements.

Is Hindustan Foods a Buy?

Market experts recommend a Hold for the short term, with eyes on the company’s Q1 FY26 performance to validate ice cream division revenue contribution. For the medium term, analysts see upside in accumulating the stock during market corrections, as operating leverage and client additions are expected to kick in.

For long-term investors, the stock is viewed as a compelling play on India’s rising FMCG outsourcing trend, especially in categories where the cost of captive manufacturing is rising and quality standards are tightening. The Nashik facility adds a new layer of growth for Hindustan Foods, which is already on a path to becoming a diversified, scalable, and ESG-compliant manufacturing partner.

What Is the Forward Outlook for Hindustan Foods?

The next 12–18 months are critical as Hindustan Foods works toward scaling the Nashik plant and exploring adjacent frozen product categories. Potential extensions may include vegan frozen desserts, dairy-based innovation, and regional specialities such as kulfi and sugar-free ice creams.

The company is also expected to integrate more ESG practices into its cold-chain operations, including energy-efficient refrigeration units, recyclable packaging, and digital traceability tools that align with global best practices. These factors are likely to enhance its appeal among export-focused brands and sustainability-conscious clients.

On the broader macro front, the rise in domestic consumption, industry-wide supply chain formalisation, and government support for food processing infrastructure are strong tailwinds for players like Hindustan Foods that offer turnkey manufacturing services.