Shares of Sarveshwar Foods surged nearly 10% in intra-day trading on October 21, following the release of strong financial results for the quarter ended September 2024 (Q2FY25). The microcap FMCG company, known for its focus on organic products, delivered impressive growth in both revenue and profit, boosting investor confidence and making it a popular choice for those looking to invest in stocks.
Sarveshwar Foods' strong Q2FY25 performance drives stock surge
Sarveshwar Foods reported a substantial 68.53% increase in net profit for Q2FY25, reaching ₹8.14 crore compared to ₹4.83 crore in the same period last year. Revenue growth was also robust, rising 32.20% to ₹271.31 crore from ₹205.22 crore in Q2FY24. This impressive financial performance reflects the company's ability to scale its operations while meeting the growing demand for organic products, cementing its position in the market.
Impressive half-yearly growth
For the first half of FY25, the company saw a nearly 45% rise in net profit, reaching ₹11.2 crore compared to ₹7.73 crore in the same period the previous year. Revenue from operations grew by over 27%, amounting to ₹504.36 crore, up from ₹396.3 crore in the first half of FY24. The financial success for H1FY25 indicates Sarveshwar Foods' continued momentum, drawing attention from investors looking to invest in stocks with high growth potential.
Rohit Gupta, Chairman of Sarveshwar Group, expressed his enthusiasm about the company's financial performance, highlighting the achievement of surpassing ₹500 crore in sales during the first half of the fiscal year. He attributed this milestone to the company's product innovation and rising consumer demand for organic and sustainable food products, particularly under its 'NIMBARK' brand. Gupta emphasised Sarveshwar Foods' commitment to quality, sustainability, and empowering farmers, which has been instrumental in strengthening its supply chain and expanding its market reach.
Strategic initiatives boost future growth prospects
In a bid to bolster its capital base and support future growth, Sarveshwar Foods took a significant step in July 2024. The Board of Directors approved the issuance of 10,20,00,000 fully convertible warrants at an issue price of ₹9.70 each. These warrants, allotted to individuals in the "Non-Promoter, Public Category," grant the right to convert each warrant into one equity share. This move is expected to enhance the company's financial stability and fund its growth initiatives, making it an attractive option for those planning to invest in stocks.
Stock price trend and market outlook
The release of the strong Q2FY25 results sparked a rally in Sarveshwar Foods' stock, with prices reaching an intra-day high of ₹10.78. Despite being 31% below its all-time high of ₹15.73, achieved in February 2024, the stock has seen a remarkable turnaround. It has surged 167.5% from its 52-week low of ₹4.03, recorded in October 2023, delivering multibagger returns over the past year. The stock has climbed 118% in the last 12 months and 98% year-to-date in 2024.
Sarveshwar Foods has maintained a strong performance in recent months, with its stock gaining around 6% in October, following a 12% rise in September. Investors are increasingly considering it a compelling choice to invest in stocks, driven by the company's robust financials and expanding presence in the organic food segment.
The road ahead for Sarveshwar Foods
As Sarveshwar Foods continues to capitalise on the growing demand for organic and sustainable food products, the company is well-positioned to deliver further growth. Its strategic focus on innovation, quality, and sustainability has enabled it to strengthen its market position and appeal to a broader investor base. With strong financial performance and promising growth prospects, Sarveshwar Foods presents a viable option for those looking to invest in stocks that offer long-term potential.
Investors will be keeping a close eye on the company's future developments, especially as it seeks to capitalise on favourable market conditions and the rising popularity of organic products. As the company navigates the evolving landscape, Sarveshwar Foods aims to build on its recent success and deliver sustained value to its shareholders.
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