Heritage Foods (HERITGFOOD)
CyclicalFairStock Score: 40/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹358 |
| Market Cap | ₹3,322.1 Cr |
| P/E Ratio | 24.57 |
| ROCE | 25.28% |
| ROE | 15.48% |
| Dividend Yield | 0.7% |
| Profit Growth | -34.4% |
| Debt/Equity | 0.33 |
| Sales Growth | 15.47% |
| Promoter Holding | 41.3% |
| 52-Week Range | ₹292.55 — ₹540 |
| Sector | Food Products |
| Book Value | ₹118.9 |
Strengths
- Low leverage with Debt/Equity of 0.21 provides financial cushion.
- ROCE of 25.28% shows efficient capital deployment.
- Sales growth of 8.24% indicates the business is still expanding.
- ROE of 15.48% is respectable, especially with low debt.
- Promoter holding of 41.30% provides some alignment with minority shareholders.
Concerns
- Profit growth is -19.63% and Piotroski F-Score is only 4/9, signaling deteriorating fundamentals.
- Valuation is not cheap: P/E 18.08, P/B 3.77, and PEG 2.19 on declining earnings.
- FairStock Score of 34/100 flags risk; dividend yield of just 0.79% offers little downside support.
- Stock is down sharply from its 52-week high of ₹540 to ₹361.45, reflecting negative sentiment.
AI Analysis
Heritage Foods is a decent business, but decent is not enough. At ₹361.45, I am paying ₹2,954 crore for a dairy company with a P/E of 18.08. Book value is only ₹95.96, so the price is 3.77 times book. That is not a Graham bargain. The company has some positive traits. Debt/equity is only 0.21, and ROCE of 25.28% shows efficient use of capital. ROE of 15.48% is respectable. But when I look at the operating trend, my excitement fades. Sales grew 8.24%, yet profits fell 19.63%. That is margin compression—the business is collecting more revenue but keeping less of it. The Piotroski F-score is 4 out of 9, which tells me financial health is weakening. The PEG of 2.19 is not meaningful when earnings are falling; paying a premium for negative profit growth is dangerous. The dividend yield of 0.79% is tiny. Promoter holding of 41.30% is acceptable but not high. The price has already dropped from ₹540 to ₹361, and the FairStock Score of 34/100 calls this risky. I don't want to catch a falling knife without evidence of a turnaround. The numbers do not yet show a strong moat; profit growth is negative despite positive sales growth. A clean balance sheet protects me, but it does not guarantee attractive returns. I need to see profit growth turn positive, margins stabilise, and the F-score improve before I consider buying. Until then, this is a watchlist item, not a portfolio candidate.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer