Hatsun Agro Product, known for its brands like Arun IceCreams and Arokya Milk, reported its slowest quarterly profit growth in three quarters, impacted by heavy floods in its home state of Tamil Nadu.
Last month, cyclone Michaung flooded a large part of the southern Indian state of Tamil Nadu, which is home to 13 of Hatsun’s 20 milk processing plants and, according to ICICI Securities, accounts for over half of the company’s revenue.
In the three months ending on December 31, the Chennai-based company saw a 23.6% increase in its profit after tax, reaching 574 million rupees ($6.91 million). This marks its most sluggish growth since the March quarter of 2023.
Driven by increased raw material costs, total expenses surged by 11.2 percent, offsetting Hatsun’s notable 11.3 percent rise in revenue. This represents the company’s highest revenue growth since the March quarter of 2023, attributed to a productive flush season.
The flush season, spanning from October to February, is characterized by heightened milk production resulting from lower temperatures. It serves as a strategic period for dairies to accumulate and strengthen their supply for the upcoming lean season.
Competitors Heritage Foods and Dodla Dairy are scheduled to announce their third-quarter results later this month.
Hatsun Agro’s shares climbed to a four-month peak, increasing by as much as 3.7 percent after the results. However, they later surrendered all the gains and were trading 2.1 percent lower.
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