Heritage Foods(India) Ltd - may be called as a unique listed company .This is because of the nature of its integrated operations in agri related sector. This company is promoted by Mr Chandra Babu Naidu - former chief minister of Andhra Pradesh.Company having four divisions- Dairy Business,Retail Business,Agri Business and Bakery Business.
DAIRY DIVISION
Heritages Dairy business having one of the largest network in India for collecting,processing and supplying milk. It span Across Andhra Pradesh, Tamilnadu, Karnataka, Kerala and Maharastra and consists of a number of collection points 12 packing stations, 75 chilling centers/bulk coolers,4 ice plants ..etc.Company sells Milk and Milk Products including Ghee, Paneer, Ice Cream, Cooking butter, Lassi, Doodhpeda, Fresh Cream, Curd etc.It is very difficult for any company to set up such a large supply chain which is crucial for the success of any company in Dairy business.Company also exporting Heritage Pure Ghee and Heritage Butter in Bulk and Consumer Packs from two of its units located at Tirupati and Chittoor. Company also established about 1000 'Heritage Parlor's to sell its value added dairy products across south India.
RETAIL DIVISION
Under the retail division company is selling Groceries ,fresh fruits and vegetables. Under the brand "Farmers Pride”, company offers a full range of staples like rice, pulses, spices , dry fruits..etc Company operating retail stores in two formats - Flagship store (2500 Sqft) where it sells Fresh fruits and vegetables, grocery, processed food, cleaning aids, General merchandise, bakery, dairy, beverages, and frozen food and 'Daily'format stores(1000 sqft) where it sells foods and vegetable items.In total ,company owns about 80 retail stores.
AGRI BUSINESS DIVISION
Through Agri business division ,Company having strong presence in contract farming of vegetables and fruits. These items are selling through its own retail stores. Vegetables and seasonal fruits are produced through contract farmers and then it reaches at pack houses via collection centers strategically located in villages for washing, sorting, grading and packing and dispatch to the retail stores .This backward integration ensures the freshness of vegetables and fruits sold through retail stores.Agri division activities are based at Chitoor (Andhra Pradesh), Kolar (Karnataka), Krishnagiri (Tamil Nadu) Medak and Nalgonda in Andhra Pradesh .Company having two pack houses one at Mattam and other at Mulugu. Heritage also having a Poly Green House facility for Production of Vegetable Seeds for supplying to farmers engaged in contract farming.
BAKERY DIVISION
Bakery Division is relatively a new initiative of the company ,Currently this division operates at 14 company-owned stores in Andhra Paradesh and it is planning to expand it. This division also running Hyderabad’s first Premium Bistro as “ Heritage Bon Sante Bistro” in Jubilee Hills.
What is special with Heritage food ?
This company is growing as a one stop shop for daily needs through its various verticals. This integrated business model which includes farming,processing ,retailing ,baking and diary - Heritage is a company with no comparable listed players.It is very difficult to replicate a supply chain created by Heritage which connects the farmers from remote villages with the consumers of Metros.Only negative side of its operations is the poor performance of its Retail division which is eating a major portion of the profit generated by the dairy division .After the dismal performance of retail division last year ,now company took many cost cutting efforts and even closed down some shops which are unviable. As a result ,in the December quarter loss of this division has come down by 50%.For the nine month ended December ,Heritage posted a turnover of Rs.788 Cr and a net loss of Rs.46 lakhs.It is expected to back to black on a full year basis and post good performance going forward.Any chance of a turnaround in Retail division or a separation of this division from the main company will surely changes its fortune.Chances of such a move is very high in future. Stock price of Heritage foods moved up in recent times and it is trading around Rs.234/- .Any correction below Rs.200 should be consider as a buying opportunity with a four digit price target in five years.
0 comments:
Post a Comment