Shares of Hatsun Agro Products recently bounced back by over 12% on November 5, despite a sharp fall due to disappointing Q2 results. This recovery reflects strong market interest in the stock, even as the company’s net profit dipped by 17% year-on-year. The rebound has prompted analysts to reassess their outlook, especially for those looking to invest in stocks strategically.
Hatsun Agro's Q2 performance and share recovery
In its Q2 report, Hatsun Agro revealed a net profit decline to ₹64.32 crore from the previous year’s ₹77.57 crore. However, revenue rose 8% year-on-year, totalling ₹2,072.1 crores. The stock experienced a 4% drop on initial release but soon rebounded, buoyed by an increase in trading volumes, with over 8 lakh shares changing hands—well above the average.
For those looking to invest in stocks, this recovery could indicate that market participants remain confident in Hatsun Agro’s potential. The company’s capacity to expand its EBITDA margin by 15 basis points, driven by stable milk procurement costs and an improved product mix, is a promising sign of operational resilience.
Long-term outlook for investors in Hatsun Agro
Despite Hatsun Agro's challenging first half of FY25, ICICI Securities projects a stable margin outlook for the remainder of the fiscal year, supported by efficient milk sourcing and heightened production utilisation. However, the brokerage has revised down its FY25 and FY26 earnings projections by 10% and 8%, respectively, anticipating a possible increase in milk procurement costs.
For investors who prefer to invest in stocks with potential for recovery and long-term growth, Hatsun Agro remains attractive due to its established brand, vast distribution network, and direct milk procurement model. These competitive advantages, along with operational efficiencies, suggest the company can navigate near-term challenges and potentially stabilise its earnings.
Should you invest in stocks like Hatsun Agro?
Investors considering whether to invest in stocks in the FMCG sector may find Hatsun Agro a worthwhile option. The stock’s recent bounce back indicates resilience, and while some volatility remains, Hatsun Agro’s strategic focus on cost efficiency and brand strength could lead to stabilised profits. For long-term investors, the current market conditions may provide an entry point, especially as the stock rebounds from Q2 lows.
Invest safely
Hatsun Agro Products’ recent share recovery showcases its resilience, despite a tough Q2 performance. For those planning to invest in stocks, particularly in India’s FMCG sector, Hatsun Agro’s current trajectory offers an intriguing investment opportunity with potential for recovery and growth in the coming quarters. This resilience, combined with the company’s sound operational strategies, makes Hatsun Agro a stock to watch in the evolving market landscape.
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