Mehabe score: 6 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
Heritage Foods is engaged in the business of procurement and processing of Milk & Milk products and also generation of power through solar & wind for the captive consumption of its dairy plants.# The company has a reach to over 15 lakh households in India.#
Stock trades at 483.0, above its 50dma 390.04. It also trades above its 200dma 339.46. The stock remains bullish on techicals
The 52 week high is at 508.00 and the 52week low is at 242.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 21.70% CAGR over last 5 years
Weakness
– Stock is trading at 3.78 times its book value
-The company has delivered a poor sales growth of 0.77% over past five years.
– has a low return on equity of 3.75% for last 3 years.
Competition
– The industry trades at a mean P/E of 51.0x. Tasty Bite Eat. trades at the industry’s max P/E of 117.38x. HERITGFOOD trades at a P/E of 14.9x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 8.0. HERITGFOOD has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 8.6%. The max 1- month return was given by KRBL: a return of 23.14 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 619.0 cr compared to Rs 653.0 cr for period ended Mar 2020, a fall of 5.2%
Company reported operating profit of Rs 44.0 cr for period ended Mar 2021, operating profit margin at 7.1 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 5.27 compared to Rs 5.67 for previous quarter ended Dec 2020 and Rs -45.09 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2473.0 cr for period ended Mar 2021 vis-vis sales of Rs 2726.0 cr for the period ended Mar 2020, a fall of 10.2%. The 3 year sales cagr stood at 1.4%.
Operating margins expanded to 11.0% for period ended Mar 2021 vis-vis -14.0% for period ended Mar 2020, expansion of 2500.0 bps.
Net Profit reported at Rs 150.0 cr for period ended Mar 2021 vis-vis sales of Rs -160.0 cr for the period ended Mar 2020, rising 206.7%.
Company recorded a healthy Net Profit CAGR of 33.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 174.0 cr for period ended Mar 2021 vis-vis Rs 117.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 29.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 83% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -9% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is 194% vis-vis a compounded profit growth of 34% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.79% vis-vis 4.55% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 42.8% vis-vis 40.1% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 21.70% CAGR over last 5 years – Stock is trading at 3.78 times its book value
-The company has delivered a poor sales growth of 0.77% over past five years.
– has a low return on equity of 3.75% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 390.04 and is trading at 483.0, thus bullish price action wise.
