Small-Cap Dairy Stock Rallies 17% Post Acquisition Call; Brokerage Bullish

By Malvika Gurung

Investing.com — Shares of the dairy company Dodla Dairy (NS:) surged 16.6% to Rs 532.9 apiece at the time of writing, after rallying over 19% in early session on Monday, as the company acquired the Karnataka-based Sri Krishna Milks.

The company announced on Saturday that it acquired the dairy firm Sri Krishna Milks for Rs 50 crore to expand its business and strengthen its footprint in Karnataka and Southern Maharashtra.  The latter is the first private sector dairy company in Karnataka, with a turnover of Rs 67.27 crore in FY21.

The deal is expected to close in the next two months, and the consideration would be in the form of cash, stated PTI.

Furthermore, brokerage firm ICICI Securities (NS:) has initiated a Buy call on the small-cap dairy stock with a target price of Rs 615, for a time period of one year to reach the target.

The brokerage expects the company to post revenue of 13.7% and a PAT CAGR of 14.3% over FY21-24 and estimates a return on equity of over 16% in FY24. It also ‘remains structurally positive on Dodla due to its competitive advantages and strong growth opportunity in South India’, cites an ET report.