Indian dairy firm Hatsun Agro's Q1 profit jumps on higher milk demand

Hatsun Agro Product

19/07/2023 15:20

BENGALURU, July 19 (Reuters) - Indian milk processing
firm Hatsun Agro Product  HAPL.NS  said on Wednesday its
quarterly profit surged 54% as a rise in input costs was offset
by higher milk prices on the back of strong demand.
    Milk prices in India hit its peak during the June quarter on
account of lower output and robust demand, while the coinciding
summer season with the quarter increased demand for ice-creams
and curds.
    The company, which sells products under brands like Arun Ice
Cream and Arokya Milk, said its profit after tax rose to 801.6
million rupees ($9.8 million) for the quarter ended June 30,
from 519.5 million rupees a year earlier.
    Its revenue also rose nearly 7% year-on-year to 21.51
billion rupees.
    However, the Chennai-based company said its raw material
costs rose nearly 12% to 15.14 billion rupees, accounting for
nearly three-fourths of the total expenses.
    To protect margins, dairy companies in India kept the prices
of their products unchanged even when there was a fall in
procurement prices.
    Analysts at ICICI Securities on the dairy sector said cattle
feed prices also stabilised during the quarter.
        The company procures milk from most of the southern
states -- including Tamil Nadu, Andhra Pradesh, Telangana,
Karnataka, besides the western state of Maharashtra -- a region
which according to analysts has seen a decline in milk inflation
through the first half of the year. 
  
    Analysts added they expect milk procurement prices to
further slide in the coming quarters due to the monsoon season
and commencement of the flush season. 
    Hatsun Agro Product declared an interim dividend of six
rupees per share, while its stock closed 0.65% up ahead of the
results.

($1 = 82.0691 Indian rupees)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Sohini
Goswami)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))