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ICICI Securities Report
Heritage Foods Ltd. reported revenue decline of 11.4% and profit after tax growth of 65.1% YoY.
Ebitda margin expanded 270 basis points, YoY. We expect it to report revenue compound annual growth rate of 8.2% over FY20-22. We also model -added products to report revenue decline in FY21-22.
Post lockdown, the milk procurement prices have corrected and are expected to be lower with commencement of flush season.
We expect Ebitda margins to be above 150 basis points higher in FY21 due to price hikes of approximately 12% in FY20, lower sales of ghee and skimmed milk powder which have lower margins and approximately 15% correction in milk procurement prices.
We model Heritage to report PAT CAGR of 38.3% over FY20-FY22 with improvement in core return ratios.
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