Fundamental Analysis

HINDUSTAN FOODS LIMITED 

Ticker : 519126
BUY: Rs 1,299.35
Target: Rs 1,440

Hindustan Foods Ltd (HFL) is a manufacturer of nutritional food products based in India. Its business is diversified across various fast-moving consumer goods (FMCG) category with manufacturing competencies in food & non-food, extending to cosmetics, personal care, and home care products. On a consolidated quarterly front, its net sales gave a substantial rise of 84.61 per cent for Q2FY21 to Rs 318.45 crore from Rs 172.50 crore during the same period of the previous fiscal year. The company reported an operating profit of Rs 22.04 crore in Q2FY21, up by 72.29 per cent from Rs 12.79 crore reported in Q2FY20. Similarly, its net profit increased by 70.16 per cent from Rs 4.91 crore in Q2FY20 to Rs 8.35 crore in Q2FY21. HFL gets the majority of its revenue through a dedicated unit type of a business model wherein, the company enters into long-term contracts with guaranteed fixed returns. This gives a positive indication of the growth & sustainability of the company and its business model. Hence, we recommend a BUY for this company.