Amul price hike: What does this mean for dairy-related stocks?

The price hike may spark a bullish rally in dairy-related stocks like Hatsun Agro Product, Heritage Foods and Parag Milk Foods indicate charts.

Shares of dairy products were trading with substantial gains in the morning session on Wednesday. The Heritage Foods surged 2.50 per cent, while Hatsun Agro Product added 1.25 per cent.

The India’s largest producer of dairy products, Gujarat Cooperative Milk Marketing Federation, owner of Amul brand, announced a hike in milk price by Rs 2 per litre on Tuesday. The price hike translates into a 4 per cent hike on MRP. And this is the second price hike in the last 8 months, earlier was in July 2021.

The price increase could trigger a similar move by competing dairy companies in the segment.

Here’s the outlook for stocks in dairy-related businesses:-

Hatsun Agro Product Ltd (HATSUN)

Likely target: Rs 1,200 and Rs 1,250

Upside potential: 5% to 9%

 

There is a perfect “Symmetrical triangle” formation on the daily chart. If the stock pulls out the upper falling trendline at Rs 1,145, which it seems in the process by sustaining above Rs 1,050, then could result in a robust breakout. The stock might see an uninterrupted move towards Rs 1,200 and Rs 1,250 levels. The overall chart structure displays sideways movement with lesser inclination of a weakness.  CLICK HERE FOR THE CHART

Heritage Foods Ltd (HERITGFOOD)

Likely target: Rs 370 and Rs 390

Upside potential: 8% to 14%

Shares of Heritage Foods breached the Rs 300-mark last Thursday, which was last seen in April 2021. It has since recovered and any up move above Rs 340 now could instill a positive boost for the stock. The breakout would mean an upside towards Rs 370 and Rs 390, from a medium-term scale. The closing basis support for the stock lies at Rs 300 mark, as per the daily chart setup. CLICK HERE FOR THE CHART

Parag Milk Foods Ltd (PARAGMILK)

Likely target: Rs 112

Upside potential: 11%

The last time when Parag Milk Foods ascended from the oversold category of the Relative Strength Index (RSI), it soared 11 per cent. This was in late December 2021 to January 2022. The same could happen this time as the stock climbs from its oversold territory, as per the daily chart.

The present scenario has a firm price action, which is not supported by high volumes, but the momentum continues to grow. It can jump towards the gap-down level of Rs 112, having the support of Rs 95 level, the recent reversal mark. CLICK HERE FOR THE CHART