Synopsis: Megastar Foods Limited’s stock reached a fresh 52-week high after securing a 15-year, 100% electricity duty exemption from the Punjab government. Linked to its Rs. 88.68 crore facility expansion, this long-term regulatory incentive creates a major operational cost-saving tailwind.
Megastar Foods Limited has announced a major regulatory milestone that could significantly strengthen its long-term profitability after receiving a 15-year 100% electricity duty exemption from the Punjab government tied to its recent manufacturing expansion. The development is being viewed as a major structural cost advantage for the company, even as the stock saw some profit booking on June 16, trading at Rs. 317.05 on NSE, down 2.63%, after opening at Rs. 335, which also marked its fresh 52-week high.
According to the company’s exchange filing dated June 15, 2026, the Department of Industries & Commerce, Punjab has issued an eligibility certificate granting Megastar Foods complete exemption from electricity duty for 15 years effective November 18, 2024, the date when commercial production began after its latest expansion project. The exemption has been granted under Punjab’s Industrial & Business Development Policy 2017 and applies up to 100% of the company’s Fixed Capital Investment (FCI) of Rs. 88.68 crore, whichever limit is reached earlier.
This is far more significant than a routine policy incentive. In food processing businesses, electricity remains one of the largest recurring operational costs due to continuous milling, packaging, cold storage, grinding, and automated production lines. With Punjab’s industrial power costs averaging roughly 715 paise per kWh, a full exemption directly lowers production costs and improves operating margins for over a decade. Importantly, the benefit effectively allows Megastar to potentially recover its entire Rs. 88.68 crore expansion investment purely through future power savings over time.
The exemption is directly linked to the company’s major capacity expansion at its Rupnagar, Punjab manufacturing facility, where Megastar has significantly increased wheat processing capacity to 710 metric tonnes per day, more than doubling its earlier capacity of nearly 300 MT per day. The facility also carries a technological advantage as one of Punjab’s few food processing units equipped with advanced Buhler milling machinery from Switzerland, improving efficiency, precision, and energy utilization.
The announcement comes at a time when Megastar Foods is already witnessing strong financial momentum. For FY26, the company reported 47.6% revenue growth, with total revenue rising to Rs. 533.11 crore compared to Rs. 361.25 crore in FY25. Profitability improved even faster, with net profit surging 145% to Rs. 9.30 crore, while EBITDA for the March quarter stood at Rs. 10.08 crore, reflecting improving operational leverage as expansion capacity begins contributing to earnings.
Despite today’s mild correction, the stock remains one of the stronger performers in the small-cap space. Shares are still up over 40.6% year-to-date, trading near their record high of Rs. 335 compared to the 52-week low of Rs. 203, while the company commands a market capitalization of nearly Rs. 359 crore with a P/E ratio of 39.5.
Another major positive for investors is Megastar’s strong B2B customer base. The company supplies food products to large institutional clients including Nestlé India, Britannia Industries, ITC Limited, Jubilant FoodWorks, and Mondelez India, providing long-term demand visibility as expanded capacity ramps up.
For investors, the biggest takeaway is simple: while the market often focuses on revenue growth and new orders, this 15-year electricity exemption quietly creates a long-term structural margin advantage that can materially boost earnings for years ahead, making it one of the most significant profitability catalysts the company has announced in recent quarters.
Company Overview
Megastar Foods Limited is a leading bulk food processing company in India, specializing in the production of high-quality wheat-based products such as refined flour (maida), whole wheat flour (atta), semolina (suji), and bran. Operating a state-of-the-art, single-location automated facility in Punjab equipped with advanced Swiss milling technology, the company serves as a preferred B2B supplier to prominent multinational FMCG brands and food processors.
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