Bikaji Foods shares jump 5% to hit new 52-week high on strong Q1 results

Shares of Bikaji Foods International Ltd surged about 5 per cent in Wednesday's trade to hit new 52-week high after the ethnic snack maker reported a strong quarterly performance for the period ended on June 30, 2023 on Tuesday.

The packaged Foods player has reported a 164 per cent rise in the consolidated net profit on a year-on-year (YoY) basis at Rs 41.41 crore for the three-months ended on June 30, 2023. The company had clocked a bottomline of Rs 15.69 crore in the same period previous year.

The company said that its consolidated revenue from operations surged about 15 per cent YoY to Rs 481.68 crore in the June 2023 quarter, compared to Rs 418.51 crore in the year ago period,  with Volume growth of 15.2 per cent YoY, it added in the exchange filing.

Shares of Bikaji Foods International surged about 5 per cent to hit 52-week highs at Rs 508.75 on Wednesday with a market capitalization close to Rs 12,750 crore after reporting its June quarter earnings. However, the company gave up the majority of its gains as the session progressed. The stock had settled at Rs 484.10 on Tuesday.

EBITDA margins improved 630 basis points (bps) on a yearly basis to Rs 13.6 per cent, led by operating efficiency and superior mix combined with impact of softening of input material prices. Western Snacks and Ethnic Snack reported the best performance, while the latter contributed about 75 per cent of the overall margins.

“We have started fiscal year FY24 with strong double-digit value and volume growth in Q1, the performance was broad based across business segments and markets. We have delivered a resilient EBITDA margin in Q1 led by superior mix, operating leverage and effective cost management," said Deepak Agarwal, Managing Director at Bikaji Foods International.

"We remain committed to strengthening our distribution network to achieve a deeper distribution across our core & focus markets and on track to expand our direct reach to 2.4 lakhs retail stores by FY24," he added.

Bikaji Foods International was listed at the bourses in November 2022, when the company raised Rs 881.22 crore from its primary offering, which was entirely an offer-for-sale (OFS). The company sold its shares for Rs 300 apiece and the scrip it about 70 per cent above its issue price.

Bikaji Foods International is the third largest ethnic snacks company in India with an international footprint, selling Indian snacks and sweets, and is the second fastest growing company in the Indian organised snacks market.  Apart from snacks, the company is also a leading maker of packaged rasgulla, soan papdi and gulab jamun.

Bikaji’s performance was broadly in line on the revenue front but missed our optimistic profitability estimates owing to lower than envisaged expansion in gross margins. Revenue growth was completely led by volume growth which, although lower than management’s expectation, is still healthy in our view, especially given the challenging operating environment, said JM Financial.

"Core ethnic snacks segment continues to do well, which is positive, with growth seen in both core & focus markets. Bikaji’s gross margin progression since 2QFY23 has been quite strong and we expected some inventory benefit to help sustain 4Q margins in the current quarter also; however, the same did not play out," it added with a buy rating and a target price of Rs 540.

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