Fund managers and analysts that ET spoke with say Mistry was doing all the right things for shareholders, mainly deleveraging and making businesses more efficient.
Retail business has been a drag on Heritage for the past several years, depressing the company's financials net profit, profit margins and return on capital employed (ROCE).
The deal will be a win-win situation for both the companies, but Heritage Foods will be the immediate beneficiary of the deal.
With the buyback, the promoter holding in Hindustan Zinc is set to rise allowing greater control over the board, and make it possible for Agarwal to bring all group businesses under one company -Vedanta.
The stock may correct a little more because of the recent developments; but analysts believe that from a purely fundamental point of view, this shouldn't matter too much.
The company has recently increased its product prices.With recent capacity addition, it is likely to exceed Rs 1,000-crore sales in FY17.
Though the stock has gained 80% in the past six months, its current valuation continues to look attractive considering the growth prospects.
The strategy helped the company record Rs 28,136 of sales per square foot compared with an estimated Rs 9,000 for Trent and Rs 5,300 in case of Future Retail.
The company’s stock has more than doubled in the last six months, after the sharp rise in TDI and could see further investor interest with the recent development.
With this and open market purchases in July and August, promoter holding in the company will increase by around half a percent in the September quarter.
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