Heritage Foods (HERITGFOOD) – A good investment Opportunity
I remember this company for their Dairy products. When I was in Hyderabad, every morning I used to get fresh milk of Heritage from a nearby outlet. And now owning shares of their company feels really satisfying to me.
Business Profile
Heritage Foods was founded in 1992. It is headquartered in Hyderabad, India. They produce a variety of dairy products like fresh milk, buttermilk, paneer, ice cream, curd, etc. They have around 1,400 outlets and they also export dairy products to various parts of the world. You can find all their products on their official website here -> Heritage Website
They also have a Renewable Energy division which includes 11 different solar and wind power plants located in the states of Telangana, Maharashtra, Karnataka, Andhra Pradesh, and Tamil Nadu.
Fundamental Analysis
Price to Earnings(P/E) Ratio:
Heritage foods belong to FMCG – Food industry where the average price to earnings ratio is 48.18. The P/E ratio of Heritage Foods is currently standing at 11.74 which is way below the industry average. This shows the company is undervalued and is potentially a good place to invest your money.
Price to Book(P/B) Value:
The average price to book value in the FMCG (Food) Industry is 10.11x. P/B ratio of Heritage Foods is currently at 3.79x which means it is undervalued.
Financial Trend:
The company has been in profit in the last year. The profit have increased YoY.
Image Source: Tickertape
The company is consistently decreasing its liabilities and the overall financial outlook is positive.
Technical Analysis
The stock is currently moving above it’s 50 and 200 moving average. I can also see the stock is making a Ascending Triangle pattern which can be referred from the below image.
The previous recent high of the stock is at Rs 405 which was in February 2020. The current level of stocks is Rs 400 and is almost at the same position. Once the triangle breaks, we can see a good momentum in the stock price and can expect it to reach around Rs 500-Rs 600 within a few months.
The all time high of the stock is at Rs 884 during 2017. The current financial outlook looks better than it was in 2017. We can expect a good appreciation from here.
My Positions and levels to buy
I bought the stock around Rs 388 just near the Ascending Triangle Top. Below is my position on it.
Good levels to Buy: Below Rs 400
I will be holding this share for a few months from now.
If you liked the article do share it with your friends as it will motivate me to write more. 😊
Also check out our other stock recommendations here ->
1. Borosil Renewables (BORORENEW)
2. CSB Bank
