Andhra Enchantment in the Marketplace; Surge of up to 55 percent in ‘Naidu stocks’.

Following the confirmation of the Telugu Desam Party’s (TDP) landslide victory in Andhra Pradesh, shares of companies associated with Chandrababu Naidu experienced a significant surge. KCP Ltd, Heritage Foods, and other stocks related to Andhra Pradesh witnessed consecutive days of advancement. The TDP’s emergence as the dominant party in the NDA in the state administration, along with Naidu assuming the chief ministership of Andhra, further bolstered the shares.

Heritage Foods, under the control of Naidu and his family, observed a substantial increase in shares following the announcement of the election results, with a remarkable growth of 55 percent in just four days. On Friday, the shares witnessed a 10 percent rise.

Similarly, the shares of KCP Limited, which experienced a seven percent increase today, recorded a remarkable gain of 38 percent in three days. Currently, these shares are trading at Rs.235, whereas their value was only Rs.104 in June last year. During that time, Naidu’s political standing in Andhra Pradesh was diminishing, and no one anticipated the resurgence of the TDP at both the national and state levels.

Heritage Foods, a company owned by the Naidu family, has garnered increased investor interest following the election results. The stock, which closed at 426 on June 3, has displayed a remarkable performance in the subsequent days, with a growth of 55 percent in just four days. Starting at 601 on Friday morning, the shares rose by Rs 60 to reach 661 within an hour and a half.

The group has a strong presence in the dairy farm, retail, and agriculture sectors, operating primarily in Andhra and Telangana. In the financial year 2023-24, the company achieved a turnover of Rs 3,794 crore, with a profit of Rs 107 crores after all expenses. The market value of the company stands at Rs 6,238 crore.

In Andhra, politics and business go hand in hand, which explains the significant surge in KCP shares after the election results. This morning, the shares increased by 7 percent, reaching Rs. 235.

It is anticipated that Naidu will prioritize the development of Amaravati, the new capital of Andhra, which contributes to the strong performance of KCP shares. KCP has a presence in various industries such as cement, sugar, engineering, and hotels.

Although the company’s headquarters are in Chennai, it operates two cement plants in Andhra Pradesh, including one in Amaravati. Additionally, the KCP group has close ties with the TDP leadership.

For the financial year ending in March, the company recorded a revenue of Rs 2,847 crore, with a profit increase from Rs 91 crore to Rs 280 crore compared to the previous year. The market capitalization of the company is Rs 3,000 crore.

Not only Heritage Foods and KCP, but other companies from Andhra are also performing well. Stocks of companies like Amararaja Energy (9.5%), Andhra Cements (5.69%), and Andhra Sugars (8.04%) are also showing signs of improvement.