Company Update : Bikaji Foods International by JM Financial Services Ltd
Revenue growth tad better, GM recovery surprises positively
* Revenue growth better than forecast: Bikaji’s consol. sales (ex-PLI) grew 14.9% yoy (organic growth: c.11% yoy) to INR 6.4bn (2% above our estimate). Organic sales growth of c.11% yoy was largely driven by Ethnic snacks segment (contributing to c.75% of revenue) with a volume growth of 7.5% (c.9% volume growth in 4Q). Focus markets grew by 11.5% yoy while Core market grew by 8.5%. Exports grew by 60.8% yoy led by increased presence across various geographies.
* Segmentally, Ethnic snacks outperformed and grew by c.11% yoy while Western snacks grew by 4.2% yoy. Papad and Packaged sweets sales grew by 5.8% and 3.1% yoy respectively.
* Retail business reported revenue of INR 212mn during the quarter with INR 150 mn sales coming from recently acquired The Hazelnut factory. Retail store count stood at 15 (vs. 13/3 in 4QFY25/1QFY25).
* Gross margin delivery surprises positively driving overall earnings beat: Consol. GM (exPLI) grew by 20.4% with margin improvement of 152bps yoy to 33.4% (better than our estimate of 32.5%) - function of benign RM environment and benefit of selective pricing actions undertaken. GM progression was largely offset by sharp increase in staff costs and other overhead which grew by 31.6% and 28.1% yoy respectively. Resultant EBITDA margin (ex-PLI) saw compression of 57bps yoy to 13.1%, was better than our estimate of 12.8%. EBITDA (ex-PLI) grew by c.10% to INR 838mn. Higher depreciation/interest expenses (due to THF acquisition) led to PAT growth of 3% yoy to INR 599mn.
* Expanding direct distribution: As on date, Bikaji’s overall reach stood at 3.26L outlets, out of which c.15k outlets were added during the quarter. Direct coverage grew by c.20% yoy.
* The Board of directors approved the execution of a Joint Venture (50:50) cum Shareholders Agreement with C.G. Foods Nepal Ltd. to jointly establish and operate a company in Nepal for manufacturing, trading and marketing of Snacks, Namkeen, Bhujia, Papad, and Packaged sweets, leveraging combined expertise to achieve shared business objectives. The Board also approved the execution of a Loan Agreement of INR 50mn with Bikaji Bakes Private Limited, a wholly-owned subsidiary of the company.
* The Company remains confident about the business outlook and is committed to deliver long-term sustainable growth through innovation, market expansion, and deeper consumer engagement.
* Conference call is scheduled for tomorrow i.e. 24th July at 12 noon (Diamond pass link).
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SEBI Registration Number is INM000010361
