Hindustan Foods shares rise 4% on plans to merge promoter owned entity
Source: Business Standard
Hindustan Foods share price jumped 3.90 per cent at Rs 678 per share on the BSE in the early hours of trade on Wednesday. The surge in the stock price came after the company on Tuesday announced that it has initiated the merger of soups, spices and seasoning manufacturing facilities in Nashik.
The company plans to merge a promoter‐owned entity to further expand its manufacturing footprint to Nashik, Maharashtra. The said unit is owned by Avalon Cosmetics, a promoter owned company and is located in Sinnar MIDC, Nashik. ACPL acquired this factory from Smith & Nephew Private, an Indo‐ German joint venture, in 2007‐08, the company said in an exchange filing.
The facility, situated on 16 acres of land in MIDC, Sinnar, with over 100,000 square feet of built‐up area, is a food manufacturing plant, producing nearly 5,000 tons of soups, meal‐makers, energy beverages and other dry powder products annually, serving various FMCG companies in India.
To facilitate business consolidation and leverage recent developments, the Board of Directors in a meeting held on September 24th, 2024 decided to demerge ACPL’s Nashik plant into Hindustan Foods.
“The promoters who have been engaged in contract manufacturing business even before acquiring HFL have taken various steps to ensure that all operations are consolidated in Hindustan Foods Limited. This is one step in that direction which will ensure enhanced management focus and growth in scale and operations. Furthermore, as previously announced, the establishment of a new Ice Cream facility in Nashik will optimise the use of industrial land, paving the way for future growth and diversification,” said Sameer Kothari, managing director, Hindustan Foods.
Hindustan Foods further said that the board has also agreed to take steps to streamline the shareholding of the promoters by merging the holding company into HFL, making the shareholding pattern more transparent.
Incorporated on December 31, 1984, as a public limited company, Hindustan Foods Limited (HFL) is promoted by Shashi K. Kalathil and Shrinivas V. Dempo. The company specializes in contract manufacturing of fast-moving consumer goods (FMCG), focusing on home care, personal care, and food & refreshment products. This includes fruit juices, aerated beverages, tea packing, and shoe job work.
The company reported a revenue of Rs 2,381 crore in the financial year 2023-24 (FY24), and recorded a net profit of Rs 78.28 crore during this period. In the first quarter of FY25, the company registered net sales of Rs 639.66 crore, while logging net profit at Rs 20.07 crore in the June quarter of FY25.
Tha market capitalisation of Hindustan Foods is Rs 7,377.95 crore, according to Bombay Stock Exchange (BSE).
Its shares are trading at a price to earnings multiple of 92.80 times with an earning per share of Rs 7.03. The 52-week high of the company’s share is Rs 679.15 while its 52-week low is Rs 460.75 a piece.
At 10:31 AM, Hindustan Foods shares pared all their gains and slipped in red, falling 1.46 per cent at Rs 643 per share. In comparison, the BSE Sensex was down 0.06 per cent at 84,863 levels.
First Published: Sep 25 2024 | 10:41 AM IST
