Saturday, April 29, 2017

New Logo New Opportunities - Heritage Foods - Buy On Declines

Company Background

Heritage Foods Limited, formerly Heritage Foods (India) Ltd., is a fast-moving consumer goods (FMCG) company. The Company's segments are Dairy, Retail, Agri, Bakery and Renewable Energy. Its principal products/services are milk, value added products and FMCG (food and non-food). The Dairy segment mainly deals with procuring milk, processing and selling of milk, value added products, fat products, skimmed milk powder, tradable goods and job work. 

The Retail segment mainly deals with buying and selling of FMCG-food, FMCG-non-food, and fruits and vegetables. The Agri segment mainly deals with procuring, processing and selling of fruits and vegetables, tradable goods and job works. The Bakery segment mainly deals with procurement, production and selling of bakery products. The Renewable Energy segment mainly deals with generating and supply of solar power and wind power to the dairy segment for its captive consumption. It has operations across approximately 10 states in India.

South India's one of the leading dairy companies, Heritage Foods has entered the northern region with the launch of its milk and milk products.

The annual turnover of Heritage Foods crossed Rs.2380.58 crores in financial year 2015-16. To achieve its mission of reaching Rs.6000 crore revenues by end of 2022, Heritage is going to start 5 more milk processing plants in the next 5 years, the company said.
To achieve this, Heritage said, they will ramp up its current volume of 14 lakhs litres of milk per day to 28 lakh

This growth is aided by recent acquisition of Reliance Dairy’s brands, Dairy Life and Dairy Pure in North India. By entering the northern market the brand said the milk supplied in Delhi will be collected from farmers located just 5 hours away; thereby ensuring freshness and a consistent flow of good quality milk.

Stock Performance :

During the last one month the scrip has given a decent 18% return jumping from 1030 to current 1200 levels which incidentally is 52 week high.

In the last one year the scrip has doubled from the lows of Rs.510 to current Rs.1190 level giving a whopping 116% return. 

Recommendation :
Buy on declines of around Rs.1160 and hold for a target price of Rs.2235 holding period of 12 months

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