Buy Heritage Foods, target price Rs 400: ICICI Securities

ICICI Securities has buy call on Heritage Foods with a target price of Rs 400. The current market price of Heritage Foods Ltd. is Rs 338.85.

Heritage Foods Ltd. key Products/Revenue Segments include Dairy And Food Processing, Other Operating Revenue and Sale of services for the year ending 31-Mar-2020.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 622.90 Crore, up 2.79 % from last quarter Total Income of Rs 606.02 Crore and down -21.28 % from last year same quarter Total Income of Rs 791.33 Crore. Company reported net profit after tax of Rs 25.60 Crore in latest quarter.

Investment Rationale
The brokerage believes the reduction in milk procurement prices by Rs3- 4/Ltr in Q1FY22 is not sustainable and may benefit only in H1FY22. It models Heritage to report PAT CAGR of 8% over FY21-FY23. It maintains BUY with a target price of Rs400 (10x FY23E).

Promoter/FII Holdings
Promoters held 39.9 per cent stake in the company as of March 31, 2021, while FIIs held 3.8 per cent, DIIs 13.5 per cent and public and others 42.8 per cent.

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