Systematix Institutional Equities has issued a Buy rating on Hindustan Foods with a target price of ₹665, representing significant upside from the current market price of ₹525.05. According to the broker's analysis, the recommendation is based on the company's strong medium-term outlook and expected earnings growth trajectory. The target price is valued at 40x P/E on FY27E EPS, reflecting confidence in the company's transformation strategy and growth prospects.
During the Q3FY26 earnings call, Hindustan Foods management maintained its aspiration of topline growth at over 20 per cent. The company has provided specific profit guidance for FY26E and FY27E at ₹140-145 crore and ₹200-220 crore respectively, indicating earnings growth of nearly 2x over FY25-27. This growth is expected to be driven by a combination of legacy and new business segments, as reported by Systematix Institutional Equities.
The company reported revenue growth of 14 per cent to ₹1,000 crore in the latest quarter. According to the broker's analysis, Hindustan Foods remains bullish on domestic demand pick-up in ice creams, packaged water/beverages and foods (aided by GST cuts), and exports in footwear and OTC pharma on US tariff relaxations and US/UK trade deals. The transformation strategy includes adding new marquee and mid-sized clients, focusing on high-growth segments of footwear, ice cream and healthcare (collectively c.33 per cent of FY26E sales), and implementing a shared-manufacturing model.
With new business segments getting over 70 per cent share of fresh capex planned in FY26, the company's transformation is gaining momentum. As reported by Systematix Institutional Equities, the transformation includes adding new marquee and mid-sized clients, focusing on high-growth segments of footwear, ice cream and healthcare (collectively c.33 per cent of FY26E sales), and implementing a shared-manufacturing model. The broker expects the combined diversification of clients, segments and operating model to deliver potentially richer return ratios going forward.
Systematix Institutional Equities has adjusted its FY26E/FY27E EPS estimates by -2 per cent/+3 per cent respectively. The broker maintains its BUY rating with the ₹665 target price, expecting Hindustan Foods' current one-year forward P/E of 33x to re-rate based on robust project pipeline, improving RoE and healthy earnings growth trajectory. The company's current valuation is considered attractive given its growth prospects and strategic positioning in multiple high-growth segments.
