Umang Dairies gets tasty

Umang Dairies had breached the upper circuit yesterday at Rs.40.40 and today morning, it has hit a new 52-week high at Rs.43.75, with robust volumes.

The stock is in the limelight post its numbers for Q4FY14 and FY14. Engaged in the business of dairy products, a part of JK Organisation, for Q4FY14, the company posted a 60% (YoY) jump in net sales at Rs.87 crore. The company, on the operating front reported a major jump in its raw material costs and that affected the EBITDA margin, which was down 440 bps. A 60% decline in tax outgo is what helped the company end the quarter with a 78% jump in net profit at Rs.4 crore.  Thus on face value, the performance, especially the spurt in net profit looks very good but unless it works on controlling operating costs, especially raw material costs, the margins could continue to remain crunched.

The company ended FY14 with a 51% drop in net profit at Rs.6 crore on a 24% rise in net sales at Rs.192 crore.