The sporty side of Hindustan Foods: A Rs 100 crore investment surprise

The company’s shares have delivered an impressive multibagger return of 14,700% in the last decade.

Hindustan Foods Limited, a prominent contract manufacturer in the FMCG and consumer goods industry, has made a significant announcement today.

According to the details, the company has announced its plan to invest up to Rs 100 crore in establishing, acquiring, and expanding operations in the sports shoe manufacturing sector. This strategic move marks a substantial bet on the flourishing sports shoe market in India.

In recent years, the sports shoe market in India has experienced notable expansion, primarily fuelled by the increasing awareness among consumers about fitness and sports, as well as a growing appetite for sports footwear that combines comfort and style. This industry has gained traction as an increasing number of Indians adopt an active and health-conscious lifestyle. Considering this remarkable growth, the company intends to capitalize on the opportunities presented by this thriving market.

As an initial move, the company has taken the first step by entering into a Share Purchase Agreement (SPA) to acquire 100% ownership of KNS Shoetech Private Limited from its current shareholder. KNS Shoetech Private Limited, operating from its facility in Kundli, Haryana, is presently engaged in the production of an extensive range of sports shoes and sneakers.

The acquisition of KNS Shoetech marks the beginning of our journey in the sports shoe industry, and we are eager to enhance our standing in this sector through further capital investments and expansion efforts in the future.

Hindustan Foods Limited’s Managing Director, Sameer Kothari, commented on the acquisition, stating, “We have closely monitored the steps taken by the Indian Government to promote sports shoe manufacturing in India. We are convinced that the policies, coupled with the growing customer demand, will enable a robust manufacturing ecosystem. We are trying to leverage our expertise and experience in contract manufacturing to provide manufacturing solutions to Indian and global sports shoe brands.”

Moreover, the company reiterates its commitment to actively seek out and leverage new growth prospects. The company maintains its ongoing evaluation of further strategic acquisitions and investments in related industries, aiming to solidify its position as a key player in the Indian FMCG and consumer goods sector. With a forward-looking strategy, Hindustan Foods is well-prepared to sustain its delivery of top-quality products to FMCG partners nationwide.

Share Performance:

The company’s shares commenced the day at Rs 530 per share, marking a 1.7% decline from Friday’s closing price. Presently, they are trading at approximately Rs 530.95 per share on the BSE. The company’s current market capitalisation amounts to Rs 5,986 crore.

Over the past year, the stock has not exhibited a good performance. However, over the long-term horizon, the stock has delivered an impressive multibagger return of 14,700% in the last decade.

Stock Chart (Monthly)

Business Overview:

Hindustan Foods Limited, based in India, primarily specialises in contract manufacturing for a diverse range of fast-moving consumer goods (FMCG) that encompass home care, personal care, food and beverages, refreshments, and tea packaging on a contractual basis. The company’s product spectrum encompasses various categories such as food and beverages, home care, beauty and personal care, health and wellness, pest control, as well as leather, sportswear, and accessories.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.