Following an impressive stock performance over the past few years, Hyderabad-based dairy major Heritage Foods has taken up a stock split on its agenda for its board meeting on August 10.
With the consolidation of dairy business and the divestment of loss-making retail chain segment coupled with a new brand building exercise over the past one year, the company management has sent positive signals to the investors on taking the company to the next level.
Making its goals clear to the investors, the management has declared that it was aiming to achieve Rs 6,000 crore revenue mark in the next five years from Rs 2,273 crore revenue in 2016-17.
In the light of all this, the stock price jumped 8 per cent on Wednesday to hit a 52-week high at Rs 1,210 on the stock split news and gained a further 2 per cent on Thursday to trade at around 1,230. The stock price more than doubled during the past one year as the stock registered a 52 week low of Rs 520.
The company, which was established in 1992 by the present Andhra Pradesh Chief Minister Nara Chandrababu Naidu and run by his family members, had recently expanded its footprint, particularly in North India with the acquisition of Reliance group's dairy business.
"Stock split is a normal practice [that] every company follows. There was no specific trigger behind Heritage management's likely decision in this regard," Satish Kantheti, joint managing director of Hyderabad-based brokerage firm Zen Securities said.
The stock split potentially makes the share price affordable to more number of retail investors and the increased participation also expected to have a positive influence on the stock price.
Heritage had recently said that it was also in the process of finalising an international strategic tie-up involving new products.