Bikaji Foods Q1 Results Review - Margin Performance Ahead Of Estimate: Dolat Capital

Dolat Capital Report

Bikaji Foods International Ltd.’s Q1 FY25 revenue and adjusted profit after tax were in line, while Ebitda was ahead of our estimate. Revenue grew by 18.7% YoY to Rs 5.7 billion with 16.2% volume growth. Near-term revenue growth will be led by volume improvement, in our view.

Bikaji Foods posted double-digit growth across segments with packaged sweets/ ethnic/ western snacks/ papad grew by 12.3/ 16.0/26.0/14.0% respectively. Further, high margin packaged sweets is expected to increase contribution from 13% to 18% over next three years.

We increase our FY25/26E EPS estimates by 4.0/2.8% to Rs 11.3/13.4 to factor in the adjustment of benefits related to production linked incentive and anticipated increase in volume and price growth, going ahead.

We believe high revenue growth will lead to margin improvement from here on. However, considering the recent run-up in the stock price, we downward revise our rating to ‘Accumulate’ from Buy with target price revised to Rs 775 (earlier Rs 675) and valued at 58 times FY26E.

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