Scripscan:Heritage Foods India Ltd
cmp:170
Code:519552
Story:In last fiscal 08-09,it has added new facilities for making various products such as Cup curd, Doodh Peda, Paneer, Ice Cream, Ghee in the existing plants at Uppal, Gokul, Bayyavaram & Narketpally.Heritage"s market share with respect to milk and milk products in South India also increased substantially.The company now plans to invest over Rs.8.51 Crores for setting up of supporting facilities to improve the performance and effective utilisation of existing installed capacities of packing and processing plants. To maximise the revenue from products, it is establishing / increasing the production capacities for value added products and planning to tie up for UHT milk packaging for Milk, Cream and Flavoured Milk.The company has also entered the retail foray arena by launching "Fresh@"-it is a unique chain of retail stores designed to meet the needs of the modern Indian consumer, the store rediscovers the taste of nature everyday, making grocery shopping a never before experience.All these augurs well for the company and its shareholders for the coming months and years.See basic things are procurement systems for milk and processing capacities in close proximity to the purchase and sale points are two key critical success factors in the liquid milk business. Heritage Foods has made substantial investments in augmenting these capabilities over the past 10 years. After a steady ramp-up in production capacities, the company controls a huge amount of milk processing capacity across its various processing units spread throughout south India.The key risks in Heritage's business arise from the rising competition in liquid milk business, which could scale up procurement costs and its foray into value-added products. Though products such as cheese, butter and yoghurt have the potential to improve the company's profit margins, these may call for substantial investments in promotion and advertising. These are also difficult markets to break into. This is evident from the limited headway made by companies such as Nestle India and Britannia in products such as flavoured milk and ultra heat treated milk.I would rate it a hold and buy on dips stuff at these point of time.
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Tuesday, November 3, 2009
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