Shares of Heritage Foods, one of the leading dairy companies, and KCP, which has a cement plant in Amaravati, have been on the rise, in the past few days as N Chandrababu Naidu-led Telugu Desam Party emerged victorious in recently-concluded Andhra Pradesh polls.

After the results were out, the stocks gathered the momentum further. Heritage Foods, promoted by Nara Lokesh, son of Naidu’s son, hit an all-time high of ₹601.60 on Thursday. In the last five days, the stock climbed 45.4 per cent. KCP also climbed 8.82 per cent to ₹219.60. In the last 5 days, it jumped 26.65 per cent and on Thursday hit a year high of ₹238.70. 

Price hike

Besides political trigger, according to analysts, companies catering to dairy such as Heritage Foods are likely to benefit due to recent price hike in products. Recently, Amul and Mother Dairy hiked milk prices by ₹2 a litre.

Buoyed by strong demand for dairy products amid higher milk prices, Heritage Foods reported a significant increase in Q4 net profits which zoomed 126 per cent year-on-year to ₹40.5 crore while revenue jumped 16.3 per cent to ₹950.6 crore.

Analysts at 5paisa suggest holding existing long positions in Heritage Foods stock. The company launched new range of pure ghee laddus under the brand name Truly Good.

KCP, with interests in cement, sugar, hospitality and engineering, has a cement plant near Amaravati, one of the three capitals proposed for the State. The Chennai-based company’s key businesses are cement and sugar which make up for 96 per cent of its total income. The engineering and hotel businesses are two of its smaller divisions. Though these companies are attracting significant attention from investors, analysts doubt the sustainability of the rally and advised them to remain cautious.

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