Small-cap stock involved in the manufacturing, processing, and marketing of dairy products rose above 12 percent on analyst expectations of better earnings in the second half of FY25 despite reporting a 17 percent year-on-year decline in net profit for Q2 FY25.
Share price variations:
With a market capitalization of Rs. 25,572.61 crores, Hatsun Agro Product Ltd (NS:HAPL). rose to an intraday high of Rs. 1,200.00 per share representing a 12.3 percent increase from its previous closing price of Rs. 1,068.10 per share.
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Reason for the Rise:
On November 04 the company reported a 17 percent year-on-year decline in net profit, which fell to Rs. 64.32 crores in Q2FY25 from Rs. 77.57 crores in Q2FY24, while revenue marked an increase of 8.7 percent to Rs. 2,072.1 crores from Rs. 1,905.4 crores in comparison to the same period.
Despite the net profit decline analysts at ICICI Securities (NS:ICCI) maintain a positive outlook for the second half of FY25 on Hatsun Agro. This outlook is supported by a 15 basis point year-on-year growth in EBITDA margin, attributed to stable milk procurement prices and an improved product mix.
ICICI Securities remains optimistic about Hatsun’s prospects for the second half of FY25, citing competitive advantages such as its established brands, extensive distribution network, and direct milk procurement model. The firm has issued a “buy” rating with a target price of Rs. 1,250 per share, representing an upside of nearly 9 percent from the current price of Rs. 1,149.15.
About the company:
Hatsun Agro Products (HAP) is the largest Private Sector Dairy, manufacturing, processing, and marketing of Ice cream, Milk, and Milk products. The Company sells its products under the brands viz. Arun Icecreams, Arokya Milk, Hatsun Curd, Hatsun Paneer, Hatsun Ghee, Hatsun Dairy Whitener and IBACO.
The company procures over 39 Lakh liters of milk every day from its 9.55 lakh enrolled farmers. The company has over 20 + processing plants.
The Company distributes Ice Creams, Milk, and Milk Products through its ‘HAP Daily’ Stores numbering about 3000, situated in various strategic locations across Tamilnadu, Andhra Pradesh, Telangana, Karnataka, Kerala, and Maharashtra.
Besides the above, it operates its own outlets under the brand and style of ‘IBACO’ to sell Ice Creams and Chocolates and ‘OYALO’ to sell its Ready to Eat Products.
Written By: Joseph Pv
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