India’s dairy sector is one of the largest and fastest-growing in the world, contributing significantly to the country’s economy. The sector is driven by strong domestic demand for milk and milk products, with an expanding middle class and rising health-conscious consumers. With an annual growth rate of around 4-5%, India’s dairy industry is projected to continue growing, driven by innovations in dairy processing, fortified products, and the increasing export potential of dairy goods.
Key players in the sector include companies like Amul (GCMMF), Britannia, and Mother Dairy, which have established a strong market presence. Additionally, stocks of dairy-related companies such as Parag Milk Foods, Hatsun Agro, and Kwality Limited are actively traded on Indian stock exchanges, offering growth prospects for investors in this sector.
Share Price
The shares of Hatsun Agro Limited are currently trading at Rs. 978.65 down by 5.88% from its previous close of Rs. 1,039.75. The stock’s 1-year return stands at Rs. -15.75% as compared to NIfty’s 7.59% return.
Q3 result
Strong Revenue Growth
Hatsun Agro Products Ltd. reported a solid revenue growth of 6.5% in the third quarter of FY25, with revenue from operations reaching ₹2,009.8 crore, compared to ₹1,886.5 crore in the same period last year. The growth reflects the company’s ability to maintain a strong market presence despite challenges in the operating environment.
Stable EBITDA Amid Declining Profit
At the operating level, Hatsun Agro registered a modest 0.8% increase in EBITDA, reaching ₹214.3 crore in Q3 FY25 compared to ₹212.7 crore in Q3 FY24. However, the EBITDA margin contracted slightly to 10.7% from 11.3% in the previous year. While the company managed to maintain a stable operating income, higher costs, and other operational pressures impacted the margins slightly.
Decline in Net Profit & Sustainability Initiatives
Hatsun Agro’s net profit saw a significant 28.6% decline year-on-year, dropping to ₹41 crore in Q3 FY25 from ₹57.4 crore in the same quarter of FY24. The reduced profitability is attributed to higher depreciation, raw material costs, and interest costs affecting the profitability.
Strategic Partnership
In a strategic move, the company has also approved an investment in FP Solar Shakti Private Limited to promote solar energy use at its Andhra Pradesh plant. This sustainable initiative aims to reduce energy costs and enhance operational efficiency, reinforcing Hatsun Agro’s commitment to long-term growth and environmental sustainability.
Key Metrics
Hatsun Agro Products Ltd. demonstrates a Price-to-Earnings (PE) ratio of 76.3, the company reflects investor confidence in its growth potential. Its market capitalization stands at ₹21,963 crore, showcasing its significant presence in the dairy sector.
The company maintains a Return on Capital Employed (ROCE) of 13.2%, indicating efficient use of capital. The Debt-to-Equity ratio of 1.43 suggests a moderate level of financial leverage.
Additionally, the Price-to-Book Value (PBV) ratio is 13.4, while the Price-to-Earnings Growth (PEG) ratio of 4.64 indicates high growth expectations.
About the Company
Hatsun Agro Products Limited, a leader in the Indian dairy sector, has been in business for over five decades. Founded by Mr. R.G. Chandramogan, who has over 30 years of experience in the dairy industry, the company is now the largest private-sector player in the dairy market.
Hatsun Agro manufactures and markets a wide range of dairy products, including milk, milk-based items, and ice creams. Its journey began with the launch of Arun Icecreams, which has become South India’s leading ice cream brand. Arun Icecreams offers a variety of products like ice cream bars, cups, shakes, tubs, cones, and sandwiches.
Written By: Dipangshu Kundu
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
