Bikaji Foods stock rallies 5% to hit record high after Q1 results

Shares of Bikaji Foods International rallied 5.12% to record a new lifetime high of ₹509 apiece in early deals on Wednesday after the company reported impressive Q1FY24 numbers.

For the June quarter, the company's net profit showed a marked improvement compared to the same period last year. It reported a 163% YoY rise in its consolidated net profit to ₹41 crore, while in the corresponding period of the previous year, the net profit stood at ₹16 crore.

The consolidated revenue from operations grew by 15% YoY to ₹482 crore. The ethnic snacks segment, which contributes 75% of the overall revenue, recorded a growth of 16.1% YoY during Q1. Additionally, revenue from the western snacks segment, accounting for 7% of the total revenue, grew by 10.5% YoY, while packaged sweets and papad grew by 10.5% YoY and 1.1% YoY, respectively.

The EBITDA margin stood at 13.6% (up 630 bps YoY and 20 bps QoQ), led by operating efficiency and a superior mix combined with the impact of softening of input material prices.

Commenting on the Q1 performance, Deepak Agarwal, MD of the company, said," We have started fiscal year FY24 with strong double-digit value (up 15% YoY) and volume growth (up 15.2% YoY) 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. We remain committed on strengthening our distribution network to achieve a deeper distribution across our core & focus markets and are on track to expand our direct reach to 2.4 lakh retail stores by FY24."

Bikaji Foods International is currently the third-largest ethnic snacks company in India and is among the fastest-growing companies in its segment. Apart from snacks, Bikaji is also the third-largest player in sweets and the second largest papad maker in India.

The company's shares got listed on the stock exchanges on November 16, 2022, after raising ₹881 crore through its initial public offering (IPO). The IPO received a stellar response from investors, as it was subscribed to nearly 27 times.

Since its listing, the stock has maintained a steady upward movement, and it is currently trading at ₹490 apiece, a 63% premium to its IPO price of ₹300.

Earlier, domestic brokerage firm Axis Securities initiated coverage on the stock with a 'buy' rating and a target price of ₹500 apiece. The brokerage pointed out that the company's strong execution capabilities have enabled it to become the third-largest player in the organised ethnic snack market, with a market share of 9%.

Axis Securities highlights Bikaji's ambitious plans for expansion, aiming to increase its total distribution reach by more than 25% to 1.2 million outlets within the next two years.

The company enjoys a strong competitive position in the market and consistently outperforms its peers. Despite commanding premium pricing compared to its competition, Bikaji strategically allocates its resources towards expanding its distribution network and achieving scale rather than focusing solely on margins, the brokerage noted.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.