Heritage Foods Shares Hit Record After Founder Chandrababu Naidu Wins Elections

Shares of Heritage Foods Ltd. extended gains for the third consecutive session to their lifetime high on Wednesday after its founder, who is also Telugu Desam Party chief Chandrababu Naidu, won the elections by a landslide. 

With 16 seats out of 25, the Telugu Desam Party will form a coalition government with the Bhartiya Janata Party, which won three seats, and the Janasena Party, which won two seats.

Naidu founded the company in 1992, and according to the company's website, it is one of the fastest-growing publicly listed companies in India, with two business divisions: dairy and renewable energy. Its milk and milk products have a market presence in Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharastra, Odisha, NCR Delhi, Haryana, Rajasthan, Uttarakhand, and Uttar Pradesh.

According to the affidavit filed by Naidu, he holds 2,26,11,525 shares, or 24.4% stake, in the company, amounting to more than Rs 122 crore as per today's market price.

His wife, Bhuvaneswari Nara, holds a 24.37% stake in the company as of March 2024, according to BSE data.

The stock has been rising consecutively in three sessions, gaining 33.63% during this period. In the last six months, the stock has gained 73%, and it is trading 58% higher than its closing price 30 days ago.

Shares of the company surged as much as 18.21% to their record high of Rs 538.40 apiece. It pared gains to trade 15.29% higher at Rs 524.20 apiece as of 10:34 a.m. This compares to a 0.60% advance in the NSE Nifty 50 Index.

The stock has risen 72.19% on a year-to-date basis and 148% in the last 12 months. Total traded volume so far in the day stood at 4.05 times its 30-day average. The relative strength index was at 89.97, indicating that the stock may be overbought.

Four analysts tracking the company have a buy rating for the stock, according to Bloomberg data. The average 12-month consensus price target implies a downside of 14.5%.