Any current/future new fundraising through debt or equity?

The company expects that by June end, investor money will come in the form of equity through the warrant issue done in November 2022, whose 18-month period ends in June 2024. Debt levels are currently near peak due to higher production and increased inventory, but with equity infusion expected, debt may reduce. No explicit mention of new debt or equity fundraising beyond this equity infusion at June 2024. Further debt requirement depends on sales growth; drastic sales increase may require more working capital debt. Overall, current plan indicates no immediate new fundraising other than the ant

Any current/future capex/capital investment/strategic investment?

Major CAPEX focus is on the tomato processing line in Gonde, Nashik, expected to be completed by Q2 FY25, with a budget of around Rs. 15 crores. Total ongoing project cost for CAPEX is estimated between Rs. 25 crores to Rs. 30 crores. Additional CAPEX of Rs. 3-4 crores planned to enhance storage at the TPPL line, though this decision is not finalized. A small CAPEX is also being undertaken for the co-packer's top fruit processing line in Ahmednagar. Past CAPEX on TPPL processing line (70-80% complete) is included in the overall Rs. 25-30 crores. For FY25, total CAPEX expected is arou

Future growth expectations in sales/revenue/volumes?

The company targets a minimum of 20% growth in the mango business volume annually, supplemented by growth in other product segments like spray dried, frozen foods, Kusum spices, and Tetra Recart. Capacity expansions (e.g., new tomato processing line expected by Q2 FY25) support potential sales of Rs. 1,700-1,800 crores in 3 years. Spray dried and frozen food segments are growing well, with expectations of Rs. 150 crores sales in frozen foods in near future. Kusum spices aims to grow from Rs. 23 crores in FY24 to Rs. 100 crores over 3 years. Current order book was 40% higher than last y

Future growth expectations in earnings/operating earnings/profits/EPS?

Foods & Inns aims for a minimum of 20% volume growth in the mango business alongside growth in other product segments. Order book for FY25 is building, with a better clarity expected by end of July or early August 2024. The company expects increased absolute gross margin per kg, though exact top-line numbers are not guided due to raw material price volatility. EBITDA absolute figure remains stable around Rs. 100 crores excluding PLI incentives, with volume growth supporting earnings. Capacity expansions, including a tomato processing line expected by Q2 FY25, will support revenue growt

Current/ Expected Orderbook/ Pending Orders?

The order book for FY25 has just started building and a clearer picture will emerge by end of July or early August 2024. The Company usually covers maximum volume from day 1 of processing till season end. Fixed contracts exist with long-standing customers (some over 30 years). These customers are prioritized for allocations. Any additional stock after fixed contracts is sold in the open market based on demand and supply. Customer profile and order book are not challenges; procurement of raw material is the main constraint. For FY24, orders booked were 40% higher than FY23, leading to

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Foods & Inns LtdQ1 FY24Food Products

Foods & Inns Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹54.2P/E: 14.8Market Cap: ₹462 CrSector: Food Products

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company targets a minimum of 20% growth in the mango business volume annually, supplemented by growth in other product segments like spray dried, frozen foods, Kusum spices, and Tetra Recart.
→Capacity expansions (e.g., new tomato processing line expected by Q2 FY25) support potential sales of Rs. 1,700-1,800 crores in 3 years.
→Spray dried and frozen food segments are growing well, with expectations of Rs. 150 crores sales in frozen foods in near future.
→Kusum spices aims to grow from Rs. 23 crores in FY24 to Rs. 100 crores over 3 years.
→Current order book was 40% higher than last year, with delayed call-offs expected to boost volumes in FY25.
→Volumes for Q1 FY25 already indicate over 20% growth compared to Q4 FY24.
→Exact revenue guidance is withheld due to raw material price volatility affecting topline but volume growth and absolute gross margin per kg are expected to improve.

Margin guidance

Category 3

→Foods & Inns aims for a minimum of 20% volume growth in the mango business alongside growth in other product segments.
→Order book for FY25 is building, with a better clarity expected by end of July or early August 2024.
→The company expects increased absolute gross margin per kg, though exact top-line numbers are not guided due to raw material price volatility.
→EBITDA absolute figure remains stable around Rs. 100 crores excluding PLI incentives, with volume growth supporting earnings.
→Capacity expansions, including a tomato processing line expected by Q2 FY25, will support revenue growth towards Rs. 1,700 - 1,800 crores in 3 years.
→Earnings growth is driven by product mix changes and diversification into spray dried products, frozen foods, spices, and branded products.
→Debt levels are expected to peak by June 2024 with equity infusion planned via warrant conversion, limiting further debt increase.
→Operating costs include holding period finance costs, recoverable via a cost-plus pricing model; pricing and volumes are seasonal and tied to procurement cycles.

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Fundraise plans

→The company expects that by June end, investor money will come in the form of equity through the warrant issue done in November 2022, whose 18-month period ends in June 2024.
→Debt levels are currently near peak due to higher production and increased inventory, but with equity infusion expected, debt may reduce.
→No explicit mention of new debt or equity fundraising beyond this equity infusion at June 2024.
→Further debt requirement depends on sales growth; drastic sales increase may require more working capital debt.
→Overall, current plan indicates no immediate new fundraising other than the anticipated equity from the warrant issue.

Order book

Yes

→The order book for FY25 has just started building and a clearer picture will emerge by end of July or early August 2024.
→The Company usually covers maximum volume from day 1 of processing till season end.
→Fixed contracts exist with long-standing customers (some over 30 years). These customers are prioritized for allocations.
→Any additional stock after fixed contracts is sold in the open market based on demand and supply.
→Customer profile and order book are not challenges; procurement of raw material is the main constraint.
→For FY24, orders booked were 40% higher than FY23, leading to production 40% higher than sales, causing inventory carryover which is expected to clear during FY25.

Capex plans

Yes

→Major CAPEX focus is on the tomato processing line in Gonde, Nashik, expected to be completed by Q2 FY25, with a budget of around Rs. 15 crores.
→Total ongoing project cost for CAPEX is estimated between Rs. 25 crores to Rs. 30 crores.
→Additional CAPEX of Rs. 3-4 crores planned to enhance storage at the TPPL line, though this decision is not finalized.
→A small CAPEX is also being undertaken for the co-packer's top fruit processing line in Ahmednagar.
→Past CAPEX on TPPL processing line (70-80% complete) is included in the overall Rs. 25-30 crores.
→For FY25, total CAPEX expected is around Rs. 18 crores (including some Q4 CWIP costs and ECRC).
→Infrastructure built for Tetra Recart can support addition of up to 5 more lines with minimal CAPEX besides machinery.

How does Foods & Inns Ltd rank vs peers in Food Products?

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