Shares of this micro-cap stock, a prominent player in the food processing sector surged 12 percent to Rs.24.99 per share after reporting net profit growth of 132 percent in the September quarter from the previous quarter.
Price Movement
In Monday’s trading session, the share price of Himalaya Food International Ltd reached an intra-day high of Rs.24.99 per share, rising 11.96 percent from its opening price of Rs.22.32 apiece. The share has retreated since then and currently trading at Rs.22.79 per share.
Rationale for the Rise
Himalaya Food International Ltd has experienced a substantial increase in its stock price, largely driven by impressive growth in both revenue and net profit as outlined in the company’s financial results.
In the second quarter of FY25, Himalaya Food International’s net consolidated profit surged remarkably by 132 percent quarter-on-quarter, reaching Rs.2.05 crore compared to Rs.0.88 crore in Q1 FY25. Year-over-year, the company also saw a notable net profit increase of 101 percent, rising from Rs.1.02 crore in the quarter ending September FY24.
The company reported revenue of Rs.11.44 crore, representing a 6 percent increase from Rs.10.82 crore in Q1 FY25. Additionally, there was a 3.5 percent year-on-year growth, with revenue up from Rs.11.06 crore in Q2 FY24.
Himalaya Food’s stock is currently trading at a Price-to-Earnings ratio of 25.1, lower than the industry average of 40.2. Regarding return ratios, the Return on Capital Employed (ROCE) is 3.63 percent, while the Return on Equity (ROE) stands at 3.62 percent.
Future Outlook
Himalaya Food International has made significant strides recently. Promoters injected Rs.5.73 crore over the last two quarters, totaling Rs.15.74 crore, proposed for conversion to equity under an upcoming rights issue.
The company is advancing a 50,000 tons per annum French fries plant and a 12,000 TPA frozen appetizers plant, expected to be completed this financial year, with foreign consultants on-site from November.
Additionally, upgrades to the 10,000 TPA mushroom plant are ongoing, with a revamp expected by June 2025. A land sale deal is also progressing, pending necessary bank NOCs with an extension until March 2025.
Shareholding Pattern
As of June 2024, the promoters hold a 48.84 percent stake in the company, while retail investors possess a majority stake of 51.17 percent.
Company Profile
Himalaya Food International Ltd is a key player in India’s food processing sector, specializing in the cultivation and processing of mushrooms. The company also manufactures individually quick frozen (IQF) ready-to-eat products, which include dairy items and French fries.
Written by – Siddesh S Raskar
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