Chatha Foods Q2 FY26 Earnings Analysis

- Chatha Foods targets a 20%+ revenue growth for the next financial year (FY26) continuing from an 18% growth in FY25. - The existing chicken facility expects a 20% volume and revenue increase, projecting INR180-185 crore revenue. - The new vegetarian facility with 16,000 MT capacity aims to generate INR200-210 crore revenue by FY28. - The Allana JV plant is expected to contribute INR180-190 crore in revenue by FY28. - Overall, the company is targeting close to INR550 crore total revenue by FY28. - Capacity utilization targets are 20-25% for the vegetarian unit and 15-20% for the JV in FY26, scaling up thereafter. - QSR client volumes are growing; Jubilant sees 20% year-on-year volume increase despite some customers shifting to in-house production. - New QSR clients onboarded recently contributed INR7-8 crore revenue in FY25 (not annualized). - Long-term agreements with QSR clients typically range 3-5 years with annual pricing revisions.

- Management is targeting over 20% revenue growth for the next financial year, driven by expansion in chicken, vegetarian, and JV businesses. - Gross margins expected to improve next year, aided by better product mix and operational efficiencies. - Automation investments (e.g., imported cutting lines) to reduce manpower costs and improve operating margins. - New vegetarian and Allana JV facilities expected to break even between 35%-45% capacity utilization, contributing to profitability. - Overall company margins anticipated to be better with the addition of vegetarian and JV businesses alongside chicken operations. - FY26 outlook positive for both top-line growth and operating margins; margins expected to improve as commodity price pass-through stabilizes. - Management sees no major risks derailing growth plans; capacity utilization from new units to steadily increase, supporting volume and profit expansion. - FY28-FY29 revenue expected to scale broadly across core chicken, vegetarian facility, and Allana JV units, implying multi-fold growth.

- New vegetarian facility with 16,000 metric ton capacity geared to go live by September 2025; targeting 20%-25% capacity utilization initially. - Joint Venture (JV) with Allana (Allana CF Foods Pvt Ltd) focused on exports, to go live by November 2025; targeting 15%-20% capacity utilization initially. - Import of an automated cutting line to improve efficiency and reduce manpower costs, especially for artisan/hand-cut products. - Existing chicken facility near full utilization but no immediate capacity expansion planned; trial for KFC marination process ongoing without need for capacity increase. - The company aims for optimal utilization of its three facilities by FY28-29. - Approximately INR31 crore utilized from IPO proceeds for capital investments; additional preference share capital invested in bank deposits. - No current expansions or other strategic projects beyond the mentioned veg facility and JV with Allana as of now.

- There is no explicit mention of any current or upcoming fundraising through debt or equity in the provided transcript. - The company has utilized INR 31 crores from the IPO proceeds as of March 31, 2025. - The proceeds from the share capital issue via preference shares are currently invested in bank deposits. - No specific plans or discussions regarding new debt or equity fundraising were disclosed during the call. - The management did not indicate any immediate need for additional capital through raising debt or equity in the near term.

- Chatha Foods has onboarded 6-7 new QSR customers in FY '25, contributing approximately INR 7-8 crore in revenue, although some clients started only in the second half of the year. - The company maintains long-term agreements with QSR clients, typically spanning 3 to 5 years with annual pricing updates. - Despite some clients like Jubilant and Domino's shifting to in-house sourcing, overall volumes have not been negatively impacted due to increased volume commitments and growth. - Discussions and sample dispatches are underway for new product categories, including vegetarian facilities, with production aimed to start by FY '26 at 20-25% capacity utilization for veg products and 15-20% for the Allana JV by Q4. - Chatha Foods is steadily building pipeline opportunities in exports and new product segments, with ongoing engagements for large client rollouts pending menu and store implementations.