Heritage Foods shares dip 5% amid profit booking spree, down for 3rd day in a row

Heritage Foods stock fell 5% to 627.30 amid profit booking, following a 70% surge in seven sessions post election results favoring TDP. Naidu family's political success in Andhra Pradesh boosted company performance and shareholder wealth.

A Ksheerasagar
Published12 Jun 2024, 10:13 AM IST
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N Chandrababu Naidu, leader of the Telugu Desam Party, center, attends a swearing-in ceremony at the Rashtrapati Bhawan in New Delhi
N Chandrababu Naidu, leader of the Telugu Desam Party, center, attends a swearing-in ceremony at the Rashtrapati Bhawan in New Delhi(Bloomberg)

Shares of Heritage Foods fell another 5% in today's trade to 627.30 apiece, extending their downward trend for the third consecutive session as investors engaged in profit booking. The company's shares made headlines recently due to their stellar performance, soaring 70% in just seven sessions between June 4 and June 10. 

This dramatic rise was closely linked to the political landscape, as optimism surged following the Telugu Desam Party (TDP) securing a significant majority in the 2024 Andhra Pradesh assembly elections.

Also Read: Heritage Foods shares double shareholders' money in one month

The stock's bull run began immediately after exit polls projected the return of N. Chandrababu Naidu, the founder of Heritage Foods, as Chief Minister of Andhra Pradesh. 

The TDP's alliance with Pawan Kalyan and the BJP resulted in a record 164 seats, leaving the ruling YSRCP with just 11 seats out of the 175 total in the state assembly. Consequently, the YS Jagan-led party even lost the status of opposition in the assembly, as a party needs at least 18 seats to attain this status.

Also Read: TDP-related stocks take centerstage after ‘Modi stocks’

This landslide victory not only propelled the stock but also bolstered the family's fortunes significantly. The TDP, led by Naidu, has also been instrumental in the formation of the central government, holding the second-highest number of MP seats in the NDA after the BJP.

Despite Chandrababu Naidu not directly owning a stake in Heritage Foods, the strong connection between his political success and the company's performance has been evident in the market's reaction.

Naidu family members, including Bhuvaneswari Nara (wife), Nara Lokesh (son), N. Brahmani (daughter-in-law), and Devaansh Nara (grandson), along with other promoters, collectively hold a 41.3% stake in the company as of Q4FY24, according to Trendlyne data.

Also Read: KCP, Heritage Foods extend rally for second session as TDP gains power in AP

Meanwhile, Chandrababu Naidu will take the oath as Chief Minister of Andhra Pradesh along with the 24 ministers in his cabinet today, June 12. The event will be held at 11.27 a.m. at Kesarapalli IT Park near Gannavaram airport in Krishna district. 

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

 

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First Published:12 Jun 2024, 10:13 AM IST
HomeMarketsStock MarketsHeritage Foods shares dip 5% amid profit booking spree, down for 3rd day in a row

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