Demand revival in sight for Parag Milk; stock gains over four per cent

In early trade on Thursday, stock of Parag Milk Foods Limited gained as much as four per cent post the milk and milk product company's positive commentary regarding product offtake.

Generally, Parag Milk targets business segments such as direct sales and hotel, restaurants and catering (HORECA) etc. The HORECA segment companies have been through hard times amid the lockdown situation. It was also anticipated that this sector would continue to bear the brunt of COVID-19 as there might be delayed travel plans and delay in revival. Fortunately, the recent media release from Parag Milk suggests that HORECA segment has started witnessing positive demand offtake for its products. This commentary gives positive hope for not just itself but for the entire travel and hotels industry.

Paneer and cheese are major parts of HORECA segment. The company has a 35 per cent market share in the cheese segment in the country, which reflects how good the positive business outlook for cheese in HORECA as well as in the consumer segment, is for the company. Its other home consumption products such as ghee and butter have already seen an increase amid the lockdown. Owing to such strong revival hopes, the company aims to achieve pre-COVID business levels within the next few months.

The company's stock is trading at Rs 108.50, higher by 4.5 per cent, at 10.30 am on BSE.