Heritage Foods Ltd, owned by family members of AP Chief Minister N Chandrababu Naidu has become unstoppable in the Indian stock market of-late.
Though it's common for any share in stock market to rise of fall, what has been surprising stock market experts is that the stock has been increasing sharply ever since Naidu became CM of AP in June 2014.
Interestingly, Heritage is facing tough competition from other companies involved in sale of milk.
For Heritage, Hyderabad is the big market in terms of milk sales. But after Amul brand entered Hyderabad market, it captured a significant market share of Heritage with lower prices.
This forced Heritage to reduce its milk price by Rs 4 per litre. With this, the margins of the company came down and it even impacted the Heritage turnover.
As per normal market trends, the share price of a company who margins and turnover decrease, should come down. But surprisingly, the share of Heritage has more than doubled from Rs 280 which was 52-weeks ago to Rs 526 now.
Stock analysts and share market investors who are surprised to see the sharp rise in Heritage price are now analysing whether this has anything to do with "Naidu's CM power".
They now seem convinced that Heritage share would further increase in the coming days since Naidu will remain in power till 2019 and good returns will be guaranteed by then.
