Buy Heritage Foods, target price Rs 500: ICICI Securities

ICICI Securities has buy call on Heritage Foods with a target price of Rs 500. The current market price of Heritage Foods is Rs 378.1. Time period given by analyst is one year when Heritage Foods Ltd. price can reach defined target.

Heritage Foods Ltd., incorporated in the year 1992, is a Small Cap company (having a market cap of Rs 1758.02 Crore) operating in FMCG sector.

Heritage Foods Ltd. key Products/Revenue Segments include Dairy And Food Processing, Sale of services and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 670.10 Crore, down -.46 % from last quarter Total Income of Rs 673.20 Crore and up 10.57 % from last year same quarter Total Income of Rs 606.02 Crore. Company reported net profit after tax of Rs 22.28 Crore in latest quarter.

Investment Rationale
Steady value migration from co-operatives and unorganised players to private players is likely to benefit Heritage. The brokerage models Heritage to report PAT CAGR of 7.6% over FY21-FY24 with: (1) high single-digit growth in milk procurement and (2) steady increase in the share of value-added product portfolio. The brokerage is positive and maintains BUY rating on the stock with a revised DCF-based target price of Rs500 (implied P/E 11.6x of FY24E EPS; earlier TP: Rs595).

Promoter/FII Holdings
Promoters held 39.43 per cent stake in the company as of 31-Dec-2021, while FIIs owned 3.97 per cent, DIIs 15.57 per cent.