A bullish Rally is seen in the share prices of KCP Ltd, and Heritage Foods Ltd. for the third consecutive day, following reports of Telugu Desam Party (TDP) leader Chandrababu Naidu potentially becoming the new Chief Minister of Andhra Pradesh the stock prices of these companies surged.
Impressive Performance by KCP Ltd.
Opening at an intraday low of INR 222.07, KCP Ltd’s share price jumped by over 13.43%. In a single day the stock price reached a high of INR 249.10. KCP Ltd’s primary operations include cement manufacturing and sugar production, which accounts for 96% of its revenue. KCP has a cement plant near Amaravati, one of Andhra Pradesh’s three capitals. This strategic location aligns with Naidu’s ambitious plans for developing Amaravati as the state capital.
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Heritage Foods’ Strong Gains
Hitting a 52-week high, Heritage Foods saw a 10% rise. The stock opened at INR 592.95 per share, reached a low of INR 575.50, and saw a high of INR 601.60. It was founded by Chandrababu Naidu in 1992. Heritage Foods is now managed by his son, Nara Lokesh. The company is a major player in the dairy products market. It also operates in the cattle feed sector through its subsidiary, Heritage Nutrivet Ltd.
Heritage Foods Overview
Heritage Foods sells milk and milk products across 11 states in India, including Andhra Pradesh, Telangana, Tamil Nadu, and Maharashtra. The company recorded a 17% revenue growth and an 83% profit growth in the fiscal year 2023-24. The stock price has surged by nearly 96% this year.
Investor Optimism on Naidu’s Return
Market analysts believe that Naidu’s expected return to power has brought a spark of optimism amongst the investors. During his previous tenure, Naidu had ambitious plans for the development of Amaravati as the capital of Andhra Pradesh. His potential return is seen as a chance to revive these plans, which were put on hold by the YSRCP. This anticipation of renewed development has positively impacted investor’s sentiment.
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Analyst Insights and Market Trends
Ruchit Jain, Lead Research Analyst at 5paisa, said that Heritage Foods shares have shown a significant upward movement with high trading volumes post-election. This indicates a positive trend. He suggests holding onto existing positions with support around INR 500. Similarly, KCP Ltd’s new high with good volumes suggests a continuing uptrend.
Election Impact on Stock Performance
The TDP-BJP-JSP (NDA) alliance won 165 out of 175 seats in the Andhra Pradesh assembly elections. This was a signal of a strong mandate for Naidu’s leadership. Naidu’s return could bring more focus on Amaravati’s development. He had proposed Amravati as the state capital, before the YSRCP divided Andhra Pradesh into three capitals. This policy shift is a key factor driving the stock market rally for TDP-linked companies.
About Author
This article has been written by Mr Radhesh Tarang Shah, who is a third-year management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
