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Ganesh Consumer Products Ltd

BACKGROUND

Ganesh Consumer Products Ltd is a FMCG company, headquartered in Kolkata, West Bengal. It is one of the top players of in packaged foods industry in East India, with a growing presence in consumer staples such as spices and ethnic snacks. In West Bengal, it has a share of ~40.5% in by FY25 revenue for wheat-based products (incl wheat flour, maida, sooji, and dalia). It has a product portfolio of 42 products with 232 SKUs across various product categories. It is present across various distribution channels such as general trade, modern trade and e-commerce. It serves its general trade channel with 28 C&F agents, 9 super stockists and 972 distributors, as on Mar’25

Details of the Issue:

* Total issue is of ~Rs. 409 Cr (at upper price band) consists of – i) fresh issue worth Rs. 130 Cr and offer for sale worth Rs. 279 Cr from promoters and investors group.

* Proceeds from fresh issue would be utilized for the debt repayment worth Rs. 60 cr and towards capex worth Rs. 45 cr to set up a roasted gram flour and gram flour manufacturing unit in Darjeeling, West Bengal.

Investment Rationale:

* Largest brand of packaged flour in East India

* Focused Strategy on Enhancing Brand Awareness

* Consistent expansion in product portfolio to drive business growth

* Strategically located advanced manufacturing facilities

* Focus on distribution network to expand its geographical presence

* Clear Focus on Deepening B2C Operations and Geographical Expansion

* Operational efficiency at core with an investment in advanced technologies

Valuation and Recommendation:-

Ganesh Consumer has delivered healthy financial performance between FY23 to FY25, with revenue growth of ~18% CAGR and 14% CAGR in EBITDA. Ganesh consumer outperformed across major players in terms of revenue and return ratios. The ROE: 15.6%% & ROCE: 18.2%% have surpassed the peer average of 11%/14.9%, respectively. The company also demonstrates best-in-class operational efficiency with a Cash Conversion Cycle of just 21 days, roughly half the peer average, enabling it to fund growth effectively. Ganesh Consumer maintains a healthy balance sheet with a prudent D/E ratio of 0.3x, which is in line with its peers. Furthermore, the company intends to utilize INR 60 Cr from the Fresh Issue proceeds to repay debt, which will further deleverage its balance sheet and strengthen its financial position. The issue is valued at 36.7x of P/E valuation to FY25 EPS, which is at discount when compared with industry peer average with the presence in diverse business operations. Also, we remain positive on the company’s growth trajectory; this high growth is driven by a successful strategy of consistent product portfolio expansion and strong brand-building initiatives in its core East India market. Thus, we recommend SUBSCRIBE to the issue.

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SEBI Registration number is INH00000176