Bikaji Foods International Ltd reported a 163 per cent increase in profit for the quarter ended June 30, 2023, at Rs 41.410 crore, compared to Rs 15.697 crore during the corresponding quarter last year.

The company’s revenues were up by 15 per cent to Rs 482.05 crore, compared to Rs 419.15 crore last year. Sequentially, the company’s profits were higher by 8.15 per cent, compared to Rs 38.286 crore in the previous quarter.

According to a report by JM Financial Institutional Securities Limited, “Bikaji’s 1QFY24 performance was broadly inline on revenue front but missed our optimistic profitability estimates owing to lower than envisaged expansion in gross margins. Revenue growth was completely led by volume growth (+15 per cent), which, although lower than management’s expectation, is still healthy in our view, especially given the challenging operating environment. Core ethnic snacks (Bhujia & Namkeen) segment continues to do well, which is a positive, with growth seen in both core & focus markets. Bikaji’s gross margin progression since 2QFY23 has been quite strong and we expected some inventory benefit to help sustain 4Q margins in the current quarter also; however, the same did not play out. Having said that, gross margins at 32.8 per cent are still higher vs what we were factoring for full year, thereby driving upgrade to our overall earnings estimates. With core categories delivering well, along with Bikaji’s focus on distribution expansion, we expect volume trajectory to remain healthy. This, along with stable RM scenario, should help achieve EBITDA margin (ex-PLI benefit) within its targeted range of c.12.5-13 per cent for FY24. The stock has seen sharp run-up recently; however, given the superior earnings growth and improving return metrics, premium valuations are likely to sustain.”

The shares went up by 0.69 per cent to Rs 487 at 11.03 am on BSE.

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