Chennai-based Hatsun Agro Products Ltd, India’s largest private dairy, could be a $1 billion company by the end of the fiscal, going by the first half’s financial performance.

In the last financial year, the company reported revenues of ₹7,200 crore. However, at the current exchange rate, the company need to touch ₹8,326 crore to be a $1 billion company, which is currently valued at over $3 billion.

At the end of the first half of the current fiscal, the company reported a revenue of ₹4,056 crore against ₹3,762 crore in the same period last year. With the milk supply improving by 20-25 per cent in the first half, hopes are that the company could hit the $1 billion revenue mark for the fiscal.

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“The trends are positive. We did better in the first half, and things would would be even better in the second half,” RG Chandramogan, Chairman, Hatsun Agro, told businessline, when asked if the company touch $1 billion at the end of this fiscal.

For the second quarter ending September 30, 2023, the company reported a 83 per cent increase in net profit to ₹775 crore as against ₹424 crore in the same period last year. Revenue was up by 9 per cent to ₹1,905 crore (₹1,747 crore).

“All our brands are doing exceedingly well in the second quarter,” he said. The company’s brands are Arun, Arokya, Hatsun, HAP daily, ibaco, Santosa and Hanobar.

“Last year, the company was struck by the high prices of dairy ingredients. Further, there was shortage of milk. For two consecutive years during the Covid pandemic, animals did not give good yield as farmers could not feed them properly due to poor demand. However, last year, the farmers came out of Covid; the demand picked up and they could cope up with the supply,” he said.

“We had supply pressure and even to manage our milk supply, we had to buy commodities (skimmed milk powder). That’s why our commodity sale stopped. Even now, we are unable to do commodity sales but all our brands are doing well,” he said. Usually, skimmed milk powder, mainly for industrial user, will be 8-10 per cent of the company’s sales. However, we could not do that in the first half due to shortage of enough milk for producing milk products, and to have surplus milk,” he said.

However, in the last couple of months, we recorded 25 per cent increase in milk supply. This is due to 10 per cent increase in the number of farmers compared to last year. The per farmer supply increased by nearly 15 per cent. In other words, if a farmer supplied 7 litres of milk, he is now supplying 8 litres, he said.

Going forward, the surplus milk can be sold for marketing dairy ingredients. During the March quarter of this fiscal, the company will be able to sell the ingredients, he said.

With the milk supply increasing, there is a potential possibility of having cost reduction with higher sales, he said.

Hatsun’s scrip on the NSE closed at ₹1,133, down by 0.02 per cent.

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