Shares of a consumer food company notched 12.36 percent gains to reach an intraday high of ₹ 1096.60 apiece on the National Stock Exchange (NSE) after the company announced stellar results for the first quarter of the current financial year (Q1FY24). At 12:24 PM, its shares were quoting at ₹ 1053.50 apiece, up 7.95 percent.
Hatsun Agro Product is a consumer food company. It is one of the largest companies in the dairy sector, manufacturing and marketing milk and milk products. It sells ice-creams under the popular brand ‘Arun Icecreams’.
The company reported a 54.305 increase in its profit after tax at ₹ 80.16 crores for the quarter that ended on June 30, 2023 (Q1FY24), as compared to ₹ 51.95 crores in the corresponding quarter last year. On a sequential basis, its profit increased by a massive 220.77 percent from ₹ 24.99 crores in the quarter that ended on March 31, 2023 (Q4FY23).
Hatsun Agro’s revenue from operations climbed 6.75 percent year on year (YoY) to ₹ 2150.64 crores in Q1FY24, against ₹ 2014.61 crores in Q3FY23. On a sequential basis, it rose 20.18 percent from ₹ 1789.46 crores in Q3FY23. Moreover, the company has declared an interim dividend of ₹ 6 per equity share and has fixed July 27, 2023, as the record date for the same. This dividend will be paid on or before August 18, 2023.
In another development, the company’s board has approved the sale of its windmill division on a slump sale basis to the wholly owned subsidiary of V.K.A. Polymers Pvt. Ltd. for an agreed amount of ₹ 135 crores. The transaction is expected to be completed before the end of October 31, 2023.
A slump sale is the transfer of one or more undertakings for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.
With a market capitalization of ₹ 21,739 crores, Hatsun Agro Product is a mid-cap company. It has a low return on equity of 13.01 percent and an ideal debt-to-equity ratio of 1.24. Its shares were trading at a price-to-earnings ratio (P/E) of 111.14, which is substantially higher than the industry P/E of 22.53, indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
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