The curd market has witnessed significant growth in the recent past on account of a burgeoning number of health-conscious consumers in India. With the health benefits associated with curd, such as its high-protein content and gut-friendly nature with all the goodness of milk, the curd market is bound to grow rapidly in the coming years, the press release added.
According to the analysts with ICICI Securities, dairy companies with strong business moats such as brands, distribution network, and healthy balance sheet to enjoy a lower cost of capital as there will not be any (material) change in risk premium.
"With lower interest rates, the dairy companies may enjoy a better return on equity (RoE) as interest cost will be lower. With likely better return ratios and reduction in the cost of capital, the spread will expand resulting in higher economic value added (EVA) creation," it said in a sector update report on July 22.
The brokerage has a "HOLD" rating on Parag Milk and Hatsun Agro and a "BUY" call on Heritage Foods.
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