Heritage Foods Stock zoomed 34% in 3 days on TDP's landslide win

Heritage Foods hit a record high of Rs 538, as they rallied 18 per cent on the BSE in Wednesday's intra-day trade amid heavy volumes.This dairy products stock has zoomed 34% in 3 days on TDP's landslide win

Shares of Heritage Foods hit a record high of Rs 538, as they rallied 18 per cent on the BSE in Wednesday’s intra-day trade on the back of heavy volumes. In the past three trading sessions, the stock of dairy products company has surged 34 per cent following the news that Chandrababu Naidu was set to become Andhra Pradesh Chief Minister for fourth term after Telugu Desam Party’s (TDP's) landslide victory. In the past one month, the stock has zoomed 63 per cent.

At 10:01 am; Heritage Foods was trading 15 per cent higher at Rs 522.05, as compared to 0.11 per cent rise in the S&P BSE Sensex. The average trading volumes at the counter jumped over three-fold, with a combined 7.3 million equity shares changing hands on the NSE and BSE.

The Heritage Group was founded in 1992 by TDP Chief Shri Nara Chandrababu Naidu, with three-business divisions viz., dairy, retail and agri under its flagship company Heritage Foods. Nara Lokesh, the son of TDP chief N. Chandrababu Naidu, is one of the promoters of Heritage Foods.

Heritage Foods has a presence in the cattle feed business through its subsidiary, Heritage Nutrivet Limited (HNL). Heritage Foods' milk and milk products, such as Curd, Ghee, Paneer, flavoured milk, among others, are consumed by more than 1.5 million households in 11 states across India.

The company has introduced value-added products, which have boosted its overall revenue. Its ice cream/frozen dessert is witnessing rapid growth, and the company aims to expand in existing markets across channels and drive innovation.

For the financial year 2023-24 (FY24), Heritage Foods had reported a robust 83.6 per cent year-on-year (YoY) growth in its consolidated profit after tax at Rs 106.50 crore. Revenue grew by 17.1 per cent YoY at Rs 3,793.9 crore. Earnings before interest, tax, depreciation, and amortization (ebitda) jumped 51.5 per cent at Rs 209.50 crore; margin expanded 125bps at 5.52 per cent in FY24.

The spending on dairy products continues to increase due to growing awareness about their health benefits and the introduction of innovative products to the market. It has allowed small-scale dairy producers to increase their income by selling milk to larger farms that have greater access to customers in regional as well as urban markets.

The management said the strategies the company laid out few years ago of becoming more consumer centric, strengthening its portfolio with the launching of a dozen innovative products, expanding availability with an omni-channel route to market approach, intense marketing programs step changing brand preference, have all started bearing fruit. After a few years of headwinds, the dairy sector is finally seeing green shoots and the management is confident that Heritage Foods will outperform in the coming financial year.