Heritage Food is flying high at Rs 360+ surging over 130% in 100 days since Director’s wife picked up 50000 shares at @ Rs 155 !

Heritage Food is flying high at Rs 360+ surging over 130% in 100 days since Director’s wife picked up 50000 shares at @ Rs 155 !

Closed at Rs 357 today after a high of Rs 367

The Company was set up by the ex Andhra Pradesh CM,Chandrababu Naidu and is headed  by his wife, N Bhuvaneshwari ~ They hold @ 46% of the Equity  ~ Above Director’s wife shares too are included in the Promoter Group

Heritage Foods was quoted @ Rs 150 in the beginning of July 2012 ~ There was some relatively heavy volume on July 4 and July 11 ~ Company informed the BSE in a communication dated July 5,2012 but updated on BSE website on July 12,2012  that Nara Brahmani,wife of Executive Director Nara Lokesh had purchased 50000 shares in the Open Market through Zen Securities at Rs 77.50 lakhs or Rs 155 per share on July 4,2012  ~ She held just 500 shares prior to this !

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Heritage_Foods_(India)_Ltd_200712_SAST.pdf

Check out the first Fortnight July 2012 volumes on BSE for Heritage ~ normal trading was in a few thousands except for the two days stated above

Date Open Price High Price Low Price Close Price WAP No.of Shares No. of Trades Total Turnover (Rs.)

02-Jul-12

141.5

149

141.5

146.2

145.5776

2701

40

393205

03-Jul-12

149

152

149

152

151.218

1156

14

174808

04-Jul-12

159.7

159.7

148.05

154.95

154.6915

60812

163

9407102

05-Jul-12

159.7

174.95

159.7

171.9

168.9391

13345

178

2254492

06-Jul-12

177.8

177.8

163

165.6

170.2651

10006

92

1703673

09-Jul-12

164.95

164.95

153.35

156.35

157.5627

1994

49

314180

10-Jul-12

155

158.3

153

156

156.9005

1035

42

162392

11-Jul-12

155

169

155

158.25

163.1434

56483

835

9214826

12-Jul-12

158

159

154.1

156

156.5048

1042

22

163078

13-Jul-12

156.05

157

153.3

155.4

156.1259

3741

37

584067

16-Jul-12

157.2

157.2

155

155

156.7703

209

7

32765

Well Done Guys ! You’ve gained a cool 130% or over Rs 1,00,00,000 or Rs One Crore in gains INSIDE  just 100 days !

Valuation wise the FY 12 EPS was @ Rs 8 with PAT at RS 9.19 crs on an Equity (FV Rs 10) of Rs 11.53 crs ~ Book Value is Rs 80 with Networth just above Rs 92 crs ~ Q 1 FY 13 has shown superlative strong results and the mood is upbeat with a strong surge in PAT expected this year ~ PAT for the the three months ending June 30,2012 was Rs 8.44 crs ~ it thus earned in three months nearly as much as it had in the whole of last year !  However with Closing Price at Rs 357 today ,and considering FY 12 Earnings and Assets,relative valuation give a P/E of 45 and P/BV of 4.5 ~ That’s High ! and clearly a record FY 13 Year is being reflected in the surging share price  ~ EPS should comfortably double past Rs 16 and even move above Rs 20 ~ that adjusts the Forward P/E to below 20….The current Market Cap is just Rs 411 crs or @ US $ 75 Million for a Company whose Sales should cross Rs 1500 crs this year through a strong marketing and distribution Chain that cannot be replicated overnight ~ and what’s US $ 75 million for a FMCG MNC to buy out 100% of a leading Indian Listed Dairy Company that has a major market share in South India through over 1000 Franchisee and Own Retail Outlets and Parlors     

So what’s happening ! ~ Heritage Foods has been wooed by several FMCG Multinationals in the past ~ like the likes of HUL & Nestle ! ~ It’s Dairy Division is the Main Driver while the Retail Division is recovering from the nascent loss

Non Linear Earnings Growth is indicated  clearly in FY 13 and coupled with prospects of a multinational acquiring the company,there could be a further rise in this Hyderabad based company ! Q 1 FY 13  was superlative  ~ Q 2 results September 30,2012 results are to be declared when the Board meets on October 30,2012 and should confirm that FY 13 will be very upbeat with all time record earnings

But then  did we know,like the Company’s Directors did that  the June Quarter would be so delightful ! and record earnings would be made  ~ they picked up shares in four days after the June Quarter ended ! ~ results of course were updated by BSE on it’s website on July 30,2012 when the Company informed them

…or else we too would,or maybe I should say should or could  have picked the share up at Rs 155 in early July 2012 and got these awesome 130% gains in 100 days !  ~ Early August the Price began nudging Rs 200 and early September had crossed Rs 250 with October beginning  powering it past Rs 300  and in the last three days surging past Rs 320 and swinging like a pendulum intra day between Rs 325 to Rs 372

“From Farm to Fork” is the slogan of Heritage Foods ~ it’s got a spright in it’s steps and it’s best years have arrived  

So are you going to Drink Milk at Rs 357!?

Cheers !

 

 

 

5 thoughts on “Heritage Food is flying high at Rs 360+ surging over 130% in 100 days since Director’s wife picked up 50000 shares at @ Rs 155 !

  1. Hi Gaurav,
    Should we??? knowing it has political background.
    What your views on Hatson agro … While my two year stay in College in Chennai I have tasted their economical ANUN icecreams almost every week

  2. Hello sir one more concern also as you mentioned valuations are way high if and when valuation cracks it will start its downward journey in the same fashion as going up also had become more than twice in just 3 months looks a highly risky bet

  3. Sameer & Krishan,Heritage needs to sustain a superlative Q 1 showing in FY 13 for the rest of the year if it has to continue a Northward trajectory or else it has to be acquired by an MNC ~ both are indicated ~ the aggressive may yet risk it for these reasons ~ stay true to your risk profile ~ will check out Hatsun Agro for you Sameer

  4. Hey Sameer, Hatsun is a strong dividend company that paid out 37.5% of profits as Dividend in FY 12 including a special Silver Jubilee dividend ~ Networth is Rs 107 crs with Equity at Rs 10.77 crs (FV Rs 1) giving a Book of Rs 10 ~ Share Price at Rs 87 is nearly nine times Book ~High ~ PAT was just abover Rs 25 crs in FY 12 on Sales of Rs 1600 crs +,most from Milk and Milk Products ~ what pops up is the huge Loan Position of Rs 341 crs ~ it paid Rs 38+ crs Interest ~This Debt to Equity of 3.5 : 1 is a worrying financial ~ also a few days ago in a block deal the CMD R G Chandramogan increased his Promoter Group shareholding from 71% + to close to 75% by picking up over 30 lakh shares at Rs 82 in a Rs 28 cr deal from Shah Family LLC,a major shareholder which now owns yet another 20 lakh shares ~ EPS should cross Rs 4 easily this year if Q 1 FY 13 is an indication ~ Hatsun has closed over Rs 13.5 crs PAT ~ yet I’m concerned at the high Debt position in a business of low margins ~ Even relative book and earnings valuations at nearly 9 and 20+ are not exactly cheap ~ Hatsun does not look inviting ~ Cheers, Gaurav

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