The humiliating defeat faced by the Telugu Desam Party in the just concluded assembly elections in Andhra Pradesh seems to have cast its shadow on the performance of Heritage Foods, the family enterprise of TDP president and former chief minister N Chandrababu Naidu.
According to market reports, the stock prices of Heritage Foods have fallen by 25 per cent since May 23.
On Monday, the company registered a steep fall of more than five per cent, which was a 30-month low, to Rs 390, despite the fact that the market was buoyant with regard to other scrips.
Reports said the stocks of Heritage Foods had come down by 19 per cent in the past seven trading days.
Compared to last year (June 2018), when its market price was Rs 720, the stock has almost fallen by 50 per cent.
The Heritage Foods, presently being run by Naidu’s daughter-in-law Nara Brahmani, has been engaged in dairy business that includes procurement of milk from dairy farmers at village level, and distribution of processed milk to the households in 15 states.
While electoral debacle of the TDP could be one of the reasons for the fall in share value of Heritage, market reports attribute it to a slump in milk supply for the year, which led to lower milk sales prices as the unorganized dairy firms entered the urban market to sell excess milk, thereby increasing undercutting and competition.
Brahmani, in fact, was planning to register a revenue growth run-rate of 15-20 per cent over the next five years by territorial expansion in milk-rich regions and areas where consumption of milk is high, penetrate deeper in existing regions, and increase the value-added products portfolio. But the growth was in tune with the expectations.
