Megastar Foods Ltd. has received a 100 percent exemption from electricity duty for 15 years from the Punjab government, a move that could provide a long-term cost advantage for the food processing company.
The development is tied to the company’s recent manufacturing expansion and was disclosed in an exchange filing dated June 15, 2026.
Although the stock witnessed some profit booking on June 16, it touched a fresh 52-week high of Rs 335 during the session. Shares later traded at Rs 317.05, down 2.63 percent.
Exemption effective from November 2024
The Department of Industries & Commerce, Punjab, granted the benefit under the Punjab Industrial & Business Development Policy, 2017.
The exemption became effective from November 18, 2024, the date on which commercial production commenced following the company’s expansion project.
The incentive will remain available:
- For 15 years, or
- Until the company reaches 100 percent of its Fixed Capital Investment (FCI) of Rs 88.68 crore,
whichever comes earlier.
Lower power costs could support margins
Electricity is a key expense for food processing companies because of operations involving:
- Milling
- Grinding
- Packaging
- Cold storage
- Automated production lines
According to the company, the exemption could help reduce production costs and support profitability over the long term.
Capacity expansion completed
The benefit is linked to the expansion of Megastar Foods’ manufacturing facility at Rupnagar, Punjab.
Following the expansion:
- Wheat processing capacity increased to 710 metric tonnes per day (MTPD).
- Earlier capacity stood at around 300 MTPD.
The facility uses Buhler milling equipment from Switzerland, which is designed to improve efficiency and precision.
FY26 performance
Megastar Foods reported strong growth during FY26.
Key financial highlights
- Revenue increased 47.6 percent to Rs 533.11 crore, from Rs 361.25 crore in FY25.
- Net profit rose 145 percent to Rs 9.30 crore.
- EBITDA for the March quarter stood at Rs 10.08 crore.
The company said improved operating leverage from the expanded capacity contributed to earnings growth.
Stock performance
Despite the decline on June 16, the stock has remained one of the better-performing small-cap names this year.
Share performance
- 52-week high: Rs 335
- 52-week low: Rs 203
- Year-to-date gain: More than 40.6 percent
- Market capitalization: Around Rs 359 crore
- P/E ratio: 39.5
Supplies to major FMCG companies
Megastar Foods serves several institutional customers, including:
- Nestlé India
- Britannia Industries
- ITC Ltd.
- Jubilant FoodWorks
- Mondelez India
These relationships provide demand visibility as the company ramps up production.
About the company
Megastar Foods Ltd. manufactures wheat-based products such as:
- Refined flour (maida)
- Whole wheat flour (atta)
- Semolina (suji)
- Bran
The company operates an automated manufacturing facility in Punjab and primarily caters to large food companies and institutional customers.
TL;DR:
Megastar Foods has received a 15-year electricity duty exemption from the Punjab government for its expanded manufacturing facility. The benefit is linked to the company’s Rs 88.68 crore investment and could support margins by reducing power costs.
AI Summary:
- Megastar Foods secured a 15-year electricity duty exemption.
- The benefit is linked to an Rs 88.68 crore expansion project.
- Wheat processing capacity has increased to 710 MTPD.
- FY26 revenue and net profit rose 47.6% and 145%, respectively.
- The company supplies products to Nestlé, Britannia, ITC and others.
