Tasty Bite Eatables LtdQ2 FY21Food Products

Tasty Bite Eatables Ltd

Q2 FY21 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→The company plans significant capacity expansion with a Capex of 150 crores aimed at doubling production capacity, reflecting confidence in long-term growth despite short-term COVID setbacks.
→Growth targets include continuing a CAGR of 15-20%, with historical acceleration from doubling capacity every 48 months to every 36 months.
→Focus on expanding the ready-to-eat (RTE) and ready-to-serve sections, leveraging Mars partnership opportunities to manufacture products for global markets such as the US, UK, Canada, Australia, and Europe.
→Organic product offerings now comprise 70% of consumer business, driving margin improvement and market expansion.
→Expects recovery and growth in export markets, particularly in North America, with a strategic emphasis on innovation and maintaining competitive quality and pricing.
→The company aims for profitable growth underpinned by infrastructure investment and enhanced manufacturing capabilities that support sustained volume increases.

Margin guidance

Category 3

→The company plans a significant Capex of around ₹150 crores aimed at capacity expansion, primarily in the Ready-To-Eat (RTE) segment to support growth.
→Growth expectation is based on a CAGR of 15-20%, with capacity doubling intended to accommodate this expansion.
→Despite COVID-related setbacks delaying Capex deployment and impacting certain segments (e.g., Food Service Business dropped 44%), the infrastructure buildup is seen as a long-term value driver.
→Profit after tax (PAT) was resilient, with only a 4% decline despite an 11% revenue drop, indicating operational efficiencies and cost discipline.
→Tasty Bite’s focus on organic products, now comprising 70% of consumer business, is expected to enhance margins due to premium pricing and increased consumer demand.
→Strategic partnerships with Mars and potential for related party business expansion (e.g., for Ben's Original brand) offer scope for margin improvement and revenue growth.
→Management emphasizes continuous review of Capex to ensure fiscal responsibility and sustainable growth.

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Fundraise plans

→The company plans a significant Capex of approximately ₹150 crores.
→Regarding financing, the Chairman mentioned evaluating spending carefully to avoid fiscal irresponsibility and adjusting the pace of Capex if needed.
→There is a mention of careful management of cash and debt (cash balance ₹34.9 crores and debt ₹49.67 crores as of 31 March) including suggestions from shareholders to reduce loan rather than increase dividends.
→There is no explicit mention of new fundraising through debt or equity in the provided pages.
→The Capex will be financed with an emphasis on prudent fiscal management and continuous review.
→The company may use internal accruals and possibly Mars as a lender of choice, given their existing related party transactions.
→No direct confirmation of equity fundraising or new debt issuance was stated in this excerpt.

Order book

The document does not explicitly state the current or expected order book or pending orders for Tasty Bite Eatables Limited. However, related insights can be inferred: - Tasty Bite is focusing on capacity expansion with a Capex of around 150 crores, indicating preparation for increased orders or demand. - Discussions point to potential growth with Mars as a preferred partner, including manufacturing opportunities for Mars’ brands like Ben's Original. - There is optimism about tapping export markets and continued strong growth, especially in the US market. - The company is mindful of fiscal responsibility and will review spending continuously, suggesting cautious management of order fulfillment and capacity. - They have seen growth in organic product lines and remain committed to seizing market opportunities post-pandemic. No direct figures or explicit details on order book size or pending orders were disclosed in the provided pages.

Capex plans

Yes

→Tasty Bite is planning a significant Capex of around 150 crores spread over the next 2-3 years.
→The investment focuses on capacity expansion, particularly in Ready to Eat/Serve segment, doubling capacity to meet a planned CAGR growth of 15-20%.
→Infrastructure buildup is prioritized before business growth to avoid operational struggles.
→The new plant will be state-of-the-art, future-ready, expected to last 15-20 years, aligned with Mars' global manufacturing standards.
→Capex evaluation is continuous to avoid fiscal irresponsibility, with the ability to slow or accelerate investments as needed.
→Mars is exploring making Tasty Bite a preferred manufacturing partner for its global brands, including Ben’s Original (formerly Uncle Ben’s).
→New product initiatives such as organic rice and a proof of concept for noodles are underway.
→Capex is partly driven by emerging synergies with Mars to manufacture different product categories.

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