Hexagon Nutrition IPO

The company’s profitability has improved sharply over the last few years. Its net profit rose strongly to ₹24.37 crore in FY25, while profit margins expanded from 2.07% in FY23 to 7.36% in FY25. Even in the first nine months of FY26, it has generated ₹27 crore profit with a net margin of 9.81%. This growth mainly came from better cost control and a stronger focus on higher-value nutrition products that earn better margins.

Hexagon Nutrition earns a large part of its revenue from international markets, with exports contributing around 55% of total revenue. The company sells its products in more than 75 countries and also operates a manufacturing facility in Uzbekistan. This wide global presence helps reduce dependence on the Indian market alone and supports long-term growth opportunities.

The company is steadily moving towards product categories that generate higher profits. In FY25, its branded disease nutrition segment grew by 28.34%, while therapeutic foods saw a massive growth of 146.88%. Because of this shift, raw material costs as a percentage of revenue fell from 60.43% to 55.56%, which directly helped improve overall profitability.

Unlike many competitors, the company manufactures key nutritional premix raw materials on its own instead of depending heavily on outside suppliers. Backed by more than 17 research professionals and three manufacturing plants in India, this integrated setup helps maintain better quality, speeds up product development, and supports healthier profit margins across its business.

Hexagon Nutrition has built a strong position in the B2B (business-to-business) nutrition market and is among India’s leading premix suppliers for large multinational food companies. It is also an approved supplier of micronutrient powders for United Nations public health programs, which gives the business both steady institutional demand and strong credibility in the nutrition space.

The company has also shown strong improvement in capital efficiency. Its ROCE (Return on Capital Employed, a measure of how efficiently a company uses its money to generate profits) improved from 7.4% in FY23 to 18.1% in FY25. This shows the business is becoming much better at turning its manufacturing investments into profitable growth while scaling operations in a disciplined way.

Around 30% of the company’s revenue comes from a small group of 5 large institutional clients and multinational food companies. This creates concentration risk. If even a few of these major customers reduce orders, shift to another supplier, or end their contracts, the company’s revenue and overall business performance could be impacted in a big way.

Since exports contribute a large portion of the company’s revenue, its business is highly exposed to foreign currency fluctuations. Changes in exchange rates can impact earnings and profitability. On top of that, geopolitical tensions, especially in regions like West Asia, can increase shipping costs and create delays in global logistics and product deliveries.

The company also depends heavily on a limited number of suppliers and imported raw materials, especially from countries like China (58.38% of total raw material during April-December 2025), Malaysia (5.55%), and Singapore (12.09%). This exposes the business to supply disruptions, currency fluctuations, and sudden price increases. Its top 10 suppliers accounted for 53.15% of purchases.

Hexagon Nutrition manufactures more than 700 different product varieties and mainly works on a make-to-order model, meaning products are made based on specific customer demand. While this gives flexibility, it also creates operational complexity. Frequent machine adjustments and production stoppages reduce factory utilization levels and make it harder to achieve maximum manufacturing efficiency.

The company has seen a sharp decline in repeat orders within its public health business, which could make future revenues from this segment less predictable. Revenue from repeat customers in this category dropped from 36.60% or ₹108.98 crore to just 7.67% or ₹20.51 crore.

Operating across more than 14 countries means the company must comply with strict food safety and health regulations in multiple markets. Even small quality issues can become expensive. For example, a past Salmonella-related incident led to a one-time loss of ₹5.51 crore, showing how costly regulatory or compliance failures can be.

The company may also face temporary production disruptions at its Nashik facility due to earlier regulatory notices linked to unauthorized industrial construction on agricultural land. To regularize the facility, certain reconstruction work is required, which could temporarily halt some dry and liquid premix production lines and affect short-term operations.