Know about Heritage Foods, whose shares zoomed after TDP's poll sweep
Dairy company whose shares touched a fresh record high of ₹601.60 on BSE, is owned by TDP chief Chandrababu Naidu
Heritage Foods, a leading dairy products company in South India, saw a remarkable surge in its stock price following the stellar performance of the Telugu Desam Party (TDP) in the recent Andhra Pradesh elections.
The company’s shares zoomed 50 per cent in four sessions, touching a fresh record high of ₹601.60 on the Bombay Stock Exchange (BSE).
The reason was simple. Its founder happens to be N Chandrababu Naidu, whose party, the TDP, secured a thumping majority in the state Assembly elections, winning 135 seats, on June 4. Naidu’s family members hold a 41.30 per cent stake in the company. His wife, Nara Bhuvaneswari, is the vice-chairman and managing director of the company.
Successful market stint
The company's financial performance has also been impressive. In the fourth quarter that ended March 2024, Heritage Foods reported a 15.89 per cent increase in total income at ₹940.12 crore and net profit rose 20.29 per cent to ₹19.4 crore on a year-on-year basis driven by strong demand for its dairy products amid higher milk prices.
The company's stock price nearly tripled from its 52-week low of ₹207.05 on June 8, 2023, to hit a fresh record high of ₹601.60 in intraday trade on June 6, 2024. The stock has been on an unbeaten rally since June 4, gaining 47 per cent in four sessions.
Early years and growth
Naidu launched Heritage Foods in 1992 when the farming community was fragmented, and the TDP chief aimed to address this issue through his entrepreneurial venture. The company started its commercial production in 1992 with an annual turnover of ₹4.38 crores in 1993-94. The company expanded rapidly, and by 2017-18, its annual turnover had crossed ₹2,344.01 crore.
The company's dairy division has been a significant contributor to its growth, with a strong presence in various states, including Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharashtra, Odisha, NCR Delhi, Haryana, Rajasthan, Punjab, and Uttarakhand.
Its growth was so rapid, that at one point in time, it was recognised as one of the fastest-growing publicly listed companies in India. It also won the Golden Peacock Award for Excellence in Corporate Governance in 2016.
Products and operations
Heritage Foods offers a range of dairy products, including milk, curd, ice cream, buttermilk, flavoured milk, dairy whitener, and skimmed milk powder. The company directly sources milk from over 3,000 villages and employs more than 2,400 people. It also generates indirect employment opportunities for over 10,000 people.
Controversies
Heritage Foods has had its share of controversies over the years. The company was accused of selling adulterated milk, leading to adjournments in the Telangana assembly, and the Kerala government is learnt to have banned Heritage milk. It was also accused of financial irregularities, and the company has consistently denied all these allegations.
