Small-Cap Mutual Funds to Benefit from the Upmove in Heritage Foods

A Notable Surge in Stock Price

Shares of Heritage Foods Ltd hit an upper circuit of 10% on Friday, reaching an intraday high of Rs 661.25 per share on the NSE. The stock opened the session at Rs 635.95 and made an intraday low of Rs 607.15 before soaring to this new 52-week high, which also marked the upper circuit limit for the day. This impressive rise signifies a significant comeback, with the stock climbing nearly 63% from its low on June 4, 2024. 

Political Influence Boosts Stock

The recent surge in Heritage Foods’ stock price can be attributed to the political landscape. The company’s promoters, Bhuvaneswari Nara and Nara Lokesh, are the wife and son of Telugu Desam Party (TDP) leader Chandrababu Naidu, who is set to become the Chief Minister of Andhra Pradesh following the recent assembly elections. The market has reacted positively to this news, pushing the stock to hit back-to-back circuit limits on the bourses.

Promoter Holdings

As of the end of the March quarter, Bhuvaneswari Nara held a 24.37% stake in Heritage Foods, while Nara Lokesh held a 10.82% stake. Together, the promoters hold a cumulative 41.3% stake in the company. 

Mutual Funds Benefiting from the Surge

1. DSP Small Cap Fund

For small-cap mutual fund holders, there is good news. The sharp up-move in Heritage Foods’ stock price has benefited mutual funds holding stakes in the company. The DSP Small Cap Fund holds an 11.5% stake in Heritage Foods. The DSP Small Cap Fund-Direct Plan-Growth, with a fund size of Rs 14,072.97 crore, saw its NAV advance by 2.38% to Rs 183.08 as of June 6. Over the past month, this fund has added 0.6%, outperforming its benchmark BSE 250 Smallcap TRI.

2. Kotak Small Cap Fund

Similarly, the Kotak Small Cap Fund holds a 4.77% stake in Heritage Foods. The Kotak Small Cap Fund-Direct Plan-Growth saw its NAV increase by 2.17% to Rs 283.75 on June 6. This small-cap mutual fund scheme has outperformed its benchmark by a wide margin, gaining 5.3% in the last month.

Heritage Foods: A Leading Dairy Company

Heritage Foods is one of India’s leading integrated dairy companies. Recently, it launched a new range of pure ghee laddus under the brand name “TRULY GOOD.” Additionally, the company introduced a new range of ice creams for kids and unveiled new packaging formats for its farm-fresh UHT milk and the GlucoShakti whey-based energy drink.

Conclusion

Heritage Foods Ltd has shown remarkable growth, driven by political developments and strong promoter support. This surge has not only benefited direct shareholders but also small-cap mutual funds holding stakes in the company. With its innovative product launches and strong market presence, Heritage Foods continues to be a significant player in India’s dairy industry.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.