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Hatsun Agro Q2 Review - Strong Results; Stretched Valuations: ICICI Securities

Hatsun Agro Q2 Review - Strong Results; Stretched Valuations: ICICI Securities

<div class="paragraphs"><p>An employee conducts a test on a sample in a laboratory in an ice cream plant. (Photographer: Prashanth Vishwanathan/Bloomberg) &nbsp;</p></div>
An employee conducts a test on a sample in a laboratory in an ice cream plant. (Photographer: Prashanth Vishwanathan/Bloomberg)  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Key takeaways from Q2 FY22:

  1. Hatsun Agro Products Ltd. registered strong revenue growth of 23.2% YoY and we believe it is largely volume led,

  2. steady launches of new products and geographical expansion of the company's outlets continued during the quarter and

  3. Ebitda margin declined 180 basis points YoY due to higher input prices, increase in freight costs and likely increase in ad-spend.

Hatsun Agro is on track to complete its expansion at its three plants, which are likely to be completed during FY22. Power purchase agreements with Swelect will lead to cost savings.

We model the company to report profit after tax compound annual growth rate of 24% over FY21-24E with:

  1. high single-digit growth in milk procurement,

  2. commencement of three plants and

  3. lower effective tax rate in FY22E.

Click on the attachment to read the full report:

ICICI Securities Hatsun Agro Q2FY22 Result Update.pdf

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