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Business News/ Markets / Stock Markets/  Hatsun Agro share price surges 15% after Q4 result; ICICI Securities upgrades the stock to a buy
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Hatsun Agro share price surges 15% after Q4 result; ICICI Securities upgrades the stock to a buy

Hatsun Agro share price witnessed strong buying interest a day after the company reported a strong jump in Q4 profit and EBITDA.

Hatsun Agro share price surged as much as 15 per cent in morning trade on BSE on Tuesday, April 23. (Agencies)Premium
Hatsun Agro share price surged as much as 15 per cent in morning trade on BSE on Tuesday, April 23. (Agencies)

Hatsun Agro share price surged as much as 15 per cent in morning trade on BSE on Tuesday, April 23, a day after the company reported its March quarter (Q4) result. Hatsun Agro share price opened at 1122.05 against its previous close of 1023.70 and jumped 14.7 per cent to the level of 1174.65. Around 1 am, Hatsun Agro share price traded 12.73 per cent higher at 1,154 apiece on the BSE.

Hatsun Agro share price witnessed strong buying interest after the company reported a strong jump in Q4 profit and EBITDA.

Hatsun Agro Q4 result

The company's profit after tax (PAT) surged 108.76 per cent in Q4FY24 to 52.16 crore against 24.99 crore in Q4FY23, according to its exchange filing.

EBITDA for the quarter stood at 231.77 crore, up 46.64 per cent against 158.05 crore in the same quarter of the previous financial year.

Revenue from operations of the leading private sector dairy player in India rose 14.38 per cent to 2,046.87 crore in Q4FY24 against 1,789.46 crore in Q4FY23.

For the financial year 2023-2024 (FY24), PAT rose 61.15 per cent year-on-year (YoY) to 267.29 crore, EBITDA increased 29.43 per cent YoY to 921.56 crore and revenue from operations moved up by 10.26 per cent YoY to 7,990.40 crore.

Procurement of milk in FY24 saw a growth of 20.30 per cent.

Also Read: Reliance share price trades flat after Q4 result; should you buy, sell or hold? Here's what top brokerages say

“We are happy to report good growth in procurement of milk and revenues both in Q4 and for the full FY24. Strong sales recovery in the domestic market post-Covid with good summer sales led to good sales volume. All our business verticals did well with our leading brands registering healthy sales growth," said RG Chandramogan, Chairman, Hatsun Agro Product Ltd.

"Hatsun Agro Product’s retail expansion in the last two years helped us reach customers in new markets like Maharashtra, Orissa, West Bengal and Madhya Pradesh and also supported existing strong bases in South India," Chandramogan said.

"Hatsun Agro Product in the last financial year, had invested about 550 crore across new manufacturing facilities for capacity expansion in curd and milk products and in market assets. The new capacities will further support our sales plans for FY25. Considerable investments have also been made to strengthen the distribution, sales and marketing of our brands," said Chandramogan.

ICICI Securities upgrades the stock

Brokerage firm ICICI Securities upgraded the stock to a 'buy' from a 'hold' after the Q4 result and with a 10 per cent stock price correction over the past six months. It also raised the target price to 1,190 against the earlier target price of 1,145.

The brokerage firm pointed out that Hatsun reported the highest gross margins in the past 10 quarters underlining the cyclical recovery in margins due to lower milk procurement prices.

"We believe margins may expand even in FY25 as (1) the company has accumulated a large inventory of low-priced SMP (skimmed milk powder) at the end of FY24. We model Hatsun to utilize it if milk procurement prices inch upwards, (2) higher utilization of Govindapuram (AP) and Solapur (Maharashtra) plants and (3) higher revenue share of ice cream," said ICICI Securities.

The brokerage firm pointed out that Hatsun also introduced chocolates under the Hanobar and Havia brands in FY24. ICICI believes the success of chocolates will likely be margin and DCF accretive.

"We remain positive on Hatsun due to competitive advantages such as established brands, distribution and direct milk procurement. We marginally raise FY25E and FY26E earnings by 0.4 per cent and 3.3 per cent, respectively," said the brokerage.

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Published: 23 Apr 2024, 10:19 AM IST
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