India’s Heritage Foods (HEFI.NS), opens new tab reported a nearly 15% rise in fourth-quarter profit on Friday, buoyed by strong demand for its diary products.
The company’s consolidated profit before tax and exceptional items rose to 628.8 million Indian rupees ($7.35 million) in the three months ended March 31, from 548.29 million rupees a year ago.
In May, Heritage bought 7.1 million shares of its joint venture Heritage Novandie Foods for 85 million rupees from its partner, France-based dairy company Novandie, leading to certain one-time impairment charges, the company said.
Its revenue from operations climbed about 10% year-on-year to 10.48 billion rupees.
For further results highlights, click here.
KEY CONTEXT
India’s rural areas are witnessing robust demand for staples, outpacing urban centers, driven by state income support schemes and a strong harvest.
Dairy products such as cottage cheese and curd are in high demand, due in part to growing health awareness among consumers, analysts have said. Surveys indicate a majority of Indians are protein deficient due to a largely vegetarian diet.
The share of Heritage’s value added portfolio in its total revenue grew to 32.5% in the fourth quarter from 30.1% last year.
Brands, from Amul to Milky Mist, have lately been highlighting the amount of protein on packages of certain dairy products.
PEER COMPARISON
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Valuation (next 12 months)
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Estimates (next 12 months)
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Analysts’ sentiment
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|||||||
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RIC
|
PE
|
EV/EBITDA
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Revenue growth (%)
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Profit growth (%)
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Mean rating*
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No. of analysts
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Stock to price target**
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Div yield (%)
|
|
|
Heritage Foods
|
16.29
|
9.61
|
NULL
|
24.79
|
Strong Buy
|
2
|
0.70
|
0.61
|
|
|
Dodla Dairy
|
22.82
|
14.14
|
14.17
|
18.23
|
Strong Buy
|
3
|
0.79
|
0.54
|
|
|
Hatsun Agro Product
|
43.60
|
17.85
|
14.19
|
41.97
|
Hold
|
2
|
1.06
|
1.00
|
|
|
Parag Milk Foods
|
18.05
|
9.90
|
NULL
|
NULL
|
Strong Buy
|
1
|
0.81
|
0.24
|
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY TO MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.5510 Indian rupees
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