Bikaji Foods International LtdQ1 FY23Food Products

Bikaji Foods International Ltd

Q1 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

→FY23 revenue grew 22% over FY22, with a strong focus on volume-driven growth going forward.
→Volume growth in FY23 was around 15.3%, with expectations for more volume-driven growth in FY24 rather than value-driven.
→The company aims to expand reach by adding another 1.5 lakh outlets by the end of the current financial year, leveraging feet-on-ground and super stockist networks.
→Core and focus state sales have grown consistently, with core states contributing about 73% of sales in FY23.
→Growth in key categories: Ethnic Snacks and Packaged Sweets grew by ~21%, Papad by 15%, Western Snacks by 42% in FY23.
→South region exhibiting the highest growth (~68% CAGR over five years), with strong expansion also in East and North.
→Long-term growth expected through increased market penetration, product mix premiumization, and leveraging distribution channels.

Margin guidance

Category 2

→The company targets EBITDA margins to improve from around 11% in FY23 towards 14% over the next 2-3 years.
→They aim to grow EBITDA by at least 100 basis points per year through cost efficiencies and volume growth.
→Volume-driven growth is expected to be the key driver rather than price increases going forward.
→Gross margins are targeted to improve by about 150 basis points over FY23 levels, averaging around 31% annually.
→High gross margin SKUs contribution is planned to rise from 13% to 18% within three years, supporting margin expansion.
→New manufacturing plants are expected to break even at 35-40% utilization in 2-3 years, aiding operating leverage.
→Profit After Tax (PAT) growth has been strong (66.5% YoY in FY23), and further growth is expected with margin improvement and distribution expansion.
→Overall aim is sustained revenue and profit growth driven by increased reach, operational efficiencies, and premiumization.

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Fundraise plans

→There is no explicit mention of any current or planned new fundraising through debt or equity in the provided transcript.
→The company completed a capex cycle by FY24 with investments around INR 440 crores and expects no major capex post FY24.
→The focus is on leveraging existing capacity and improving operational efficiencies rather than seeking new funds.
→They have received government incentives under the PLI scheme totaling INR 261 crores over six years, which supports investment without additional external fundraising.
→No discussion on issuing new equity or taking on new debt was noted during the call.

Order book

The transcript of Bikaji Foods International Limited's Q4 FY23 earnings call does not explicitly mention details about the current or expected order book or pending orders. The discussion primarily revolves around: - Distribution reach and expansion plans (9.5 lakh outlets, with an aim to add 1.5 lakh more outlets). - Installed manufacturing capacity (270,000 metric tons). - Growth in revenue and volume. - Gross margin improvements. - Product portfolio and category performance. - Competition and market strategy. No specific data or insights concerning the order book or pending orders are provided in the transcript.

Capex plans

Yes

→Bikaji Foods is completing a capex cycle of close to INR 440 crores by the end of FY23 to fulfill PLI scheme obligations.
→Three new plants coming up in FY24: one frozen plant and two CMU plants (Patna and Raipur), adding 10,000 to 25,000 tons capacity.
→Setting up a plant in Bihar starting next month to improve logistics by shifting Namkeen production closer to target markets.
→Building plants across key locations to reduce logistic costs and meet market demand, especially in western snacks.
→Future major capex post FY23 and FY24 is not planned; current capex sufficient to fund growth for next 2-3 years.
→Investments made in solar power and shifting up to 30% of power consumption to green energy for sustainability.
→Continuous investment in advertising, brand campaigns (including Amitabh Bachchan), and expanding distribution reach.

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