Heritage Foods net profit increases by three folds, share prices soar

Share prices of Heritage Foods increased by 8% to reach to reach a high of Rs 475 on the Bombay Stock Exchange in an otherwise low lying market after the company reported three-fold jump in consolidated net profit at Rs 15.29 crore for the quarter ended September 30, 2015 (Q2FY16). This profit is on the basis of strong performance from dairy segment. Heritage Foods company had profit at Rs 4.83 crore in the same quarter last year.

Company saw a spike in the net sales which increased by 14% at Rs 576 crore against Rs 504 crore in the corresponding quarter of last financial year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of the company expanded nearly 300 basis points (bps) at 6.11%.

73% of total revenue of Heritage Foods could be accounted to its dairy segment. The segment has posted profit before finance cost and tax of Rs 34.10 crore for this quarter; a substantial increase from last year’s Rs 13.99 crore. Last year, the EBITDA margin of dairy business expanded nearly 400 basis points to 8.88% in Q2FY16 as against 4.96% in Q2FY15.

The stock hit a record high of Rs 495 on the BSE after announcements of Q2 results. A combined 364,068 shares changed hands on the counter on the BSE and NSE.

Heritage Foods Ltd is owned by family members of Andhra Pradesh Chief Minister Mr. N. Chandrababu Naidu. It has started its operations in Delhi-NCR, Mumbai and Pune. The company has strong tie ups with local farmers to procure milk.

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