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Bikaji Foods Q1 FY '25 Earnings Conference Call Summary
Financial Performance • Revenue Growth: 18.7% increase compared to Q1 FY '24; 15.6% excluding PLI income. • EBITDA Growth: 9.2% with a gross margin maintained at 32.2%.
Operational Highlights • Capex Plan: Successful completion of ₹440 crore to enhance production capacity. • Distribution Expansion: Over 20,000 new outlets added this quarter. • Rural Market Recovery: Supported by government initiatives and favorable monsoon conditions.
Product Performance • Snacks Growth: 26% increase in Western snacks; 16% volume growth in traditional snacks. • Commodity Inflation: Rising prices of chana and dry fruits impacting gross margins.
Market Insights • Focus States: Current market share at 1.8%, aiming for mid-single digits in three years. • Family Pack Sales: Performed well during heat waves; price hikes of 0.7%-0.8% implemented.
Future Outlook • Festive Season Demand: Anticipated increase in sweets sales during Rakhi, Diwali, and marriage season. • Regulatory Compliance: Confidence that new food labeling regulations will not significantly impact consumption.
Financial Projections • Advertising Spend: Targeting 1.75% of sales, with increased spending during festive seasons. • Volume Growth Target: 13% to 15% with a goal to maintain a 32% gross profit margin.
Export Strategy • PLI for Exports: Targeting 20%-25% growth in exports with a marketing budget of INR 23 crores over six years. • Distribution Teams: Focus on building teams and hiring national distributors in the US and Middle East.
Market Share and Competition • Snack Categories: Likely gained market share, particularly in Western snacks with 25% growth. • E-commerce Growth: Highlighted as a rapid growth channel for reaching consumers.
Raw Material Insights • Price Trends: Year-on-year stability but recent increases noted; average price rise of 0.7% in Q1, projected 1.5% in upcoming quarters.
Conclusion • Capacity Utilization: Sufficient to meet sales demands for the next three to four years without major investments. • Further Questions: Open invitation for additional inquiries to be addressed separately.
Bikaji Foods International Limited Earnings Conference Call Summary
Date and Purpose • Date: May 24, 2024 • Purpose: Discuss financial performance for the quarter and fiscal year ending March 31, 2024.
Key Executives • CFO: Rishabh Jain • COO: Manoj Verma
Financial Highlights • Revenue Growth: • Q4: 12.8% • Annual: 13.7% • Gross Margins: Improved to 33.1% • Profit After Tax (PAT): INR 116 crores (200% increase) • CAPEX: Completed substantial plan with government support.
Market and Distribution • Distribution Growth: Nearly 100,000 new outlets added. • Brand Ambassador: Renewed contract with Amitabh Bachchan. • Marketing Investments: Focus on digital campaigns and BTL strategies.
Performance Metrics • Q4 Volume Growth: 14.5% • Full-Year Volume Growth: 15.3% • Export Growth: 22.2% for the year.
Future Outlook • Volume Growth Target: 13-15% over the next two years. • EBITDA Margin Target for FY25: 14.5% (excluding PLI benefits). • Price Increase Anticipation: 2-4% due to inflationary pressures.
Strategic Initiatives • New Market Entry: Focus on distribution and brand quality, avoiding discounting. • Sourcing and Hedging: Secured 35%-40% of seasonal requirements to mitigate price increases.
Regional Performance • Top Growth States: Assam and Rajasthan. • Challenges: Bihar's growth impacted by flooding.
Margin Management • Western Snacks: Expected slight growth; contributes 8% to revenue but does not significantly impact overall EBITDA. • Local Production Facility: Aimed at reducing costs.
Dividend Policy • Increase in Dividends: Targeting 20-25% over the next three to five years.
Conclusion • Management expressed optimism about maintaining growth momentum and expanding market presence, addressing concerns about competition and margin management.
Bikaji Foods International Limited Earnings Conference Call Summary
Financial Performance • Quarterly Results (Q3 FY24) • Revenue growth: 23% • Volume increase: 30% • EBITDA: INR 75 crores (up 36%) • PAT: INR 46 crores for the quarter; INR 147 crores YTD (14% growth) • Gross margins: 31.5% (slight dip due to raw material costs)
• Category Performance • Ethnic Snacks: 22.18% volume growth • Sweets: 80% year-over-year increase
Distribution and Marketing Strategies • Expansion Plans • Targeting 3.5 lakh outlets in two years • Direct reach: 231,000 outlets by December, aiming for 250,000 by fiscal year-end
• Marketing Initiatives • Campaigns featuring Amitabh Bachchan • Sponsorship of Pro Kabaddi League • Significant investments in ATL and BTL marketing
Regional Performance Insights • Market Variations • Core markets: 10.5% growth • Focus markets: 22.7% growth • Challenges in Eastern India due to El Niño effects
• Product Trends • Family packs and larger sizes driving growth • Modern trade and e-commerce contribution remains low (8%)
Margin and Growth Guidance • EBITDA Margin Target • 13% target excluding PLI benefits • FY25 volume growth target: 16-18%
• Raw Material Management • No price increases on consumer packs • Targeting gross margin of 32% for the year
Product Launches and Export Growth • New Products • Successful launch of Paneer Bhujia • Expansion into new markets like Guwahati and Patna
• Export Growth • Frozen products driving growth in U.S. and Middle East • Expected 25% growth in exports over the next few years
Conclusion • Future Outlook • Commitment to growth targets, especially in high-margin products • Ongoing discussions with investors encouraged for further insights
Bikaji Foods International Limited Earnings Conference Call Summary
Financial Highlights • Q2 FY24 Performance: • 5.5% year-over-year sales growth • 36% increase in EBITDA, with margins at 14.4% • Revenue and PAT surpassed INR 1,000 crores in H1 FY24 • Volume Growth: • Salty snacks: 17% volume growth • Ethnic snacks: 10% revenue growth • Overall volume growth for H1 FY24: 10.5% • Overall revenue growth for H1 FY24: 9.5%
Distribution and Infrastructure • Expansion: • Added 46,000 outlets in Q2 FY24, totaling 208,000 • Four new depots established • Advertising and Marketing: • Increased media spending with high-profile advertisements • Aggressive consumer offers to retain customers
Challenges and Strategies • Western Snacks Segment: • Logistical costs limit distribution; focus on regional production capacity • Lower gross margins (20%) compared to ethnic snacks (26-28%) • Advertising Spending: • Increased despite sales slowdown; optimism for Q3 FY24 due to upcoming festivals
Operational Changes • Distribution Model Transition: • Shift from sub-stockist to direct distribution (CFA model) for efficiency • Gross Margin Stability: • Stable gross margin at 33%; target around 32% • Lower tax rate due to deferred tax accounting; guidance of 23% to 23.5% for FY24
Market Insights • Volume-Value Disparity: • Attributed to consumer pack introductions; expected to persist • Seasonality Effects: • Some seasonality in sweets and papad; stable salty snacks segment
Future Outlook • EBITDA Margin Goals: • Targeting 0.5% annual improvement over the next three years • Focus Markets: • Identified six focus markets representing 41% of category business • Growth target of 1.4 to 1.5 times that of core states
Conclusion • Emphasis on growth strategy and market opportunities • Acknowledgment of competition and export potential • Invitation for further questions and well wishes for Diwali
Bikaji Foods International Limited Earnings Conference Call Summary
Performance Overview • Date: August 2, 2023 • Quarter Ending: June 30, 2023 • Key Metrics: • Gross Margin: 32.8% • EBITDA Margin: 13.6% • Revenue Growth: 15% • Volume Growth: 15.2% • Core States Growth: 14.7% • Family Pack Contribution: 55.6% • Outlet Expansion: Over 950,000 nationwide • Export Growth: 29.4% • Challenges: Flooding in eastern markets
Marketing and Engagement • Marketing Initiatives: • Co-branding with a movie • Enhanced digital campaigns • Social Media Engagement: 90% growth
Capacity Expansion • Recent Capacity Increase: Over 9,000 tons added in Q1 • New Plants: Two expected by end of FY24 • Current Capacity Utilization: 40%-41% • Revenue: Rs. 482 crores (15% YoY growth) • EBITDA: Rs. 65.8 crores (113% increase YoY) • EBITDA Margin Target for FY24: 12.5%-13%
Distribution Strategy • CFA Agents Introduction: To reduce reliance on super stockists • Cost Savings: Potential 0.5%-1% savings
Market Growth and Strategy • Core Market Growth: Driven by market share gains from regional competitors • New Market Strategy: Leveraging ethnic and western snacks based on insights
Operational Efficiencies • Throughput Improvements: Average store throughput in Rajasthan increased • Sales Personnel Addition: 150 in key states like UP and Rajasthan
Product Mix and Margins • Family Packs vs. Impulse Packs: Higher margins for family packs • Future Product Mix: Western snacks projected to increase to 11%-12%
Production-Linked Incentive (PLI) Scheme • FY23 PLI Benefits: ₹20 crores received • FY24 Payout Expectation: Approximately ₹30 crores
Demand and Competitive Landscape • Short-term Demand Challenges: Noted in Bihar due to rainfall deficits • Competitive Pressure: No significant pressure to reduce prices yet
Conclusion • Growth and Investment Commitments: On track for 10% growth and ₹430 crore investment by FY24 • Strategic Acquisition: Bhujialalji for competitive flexibility • Closing Remarks: Invitation for further questions offline
Bikaji Foods International Limited Earnings Conference Call Summary
Financial Performance Highlights • Date of Call: May 24, 2023 • Key Management: CFO Rishabh Jain, COO Manoj Verma • Revenue Growth: 22% to INR 1,966 crores • EBITDA Increase: 53% to INR 214 crores • PAT Growth: 66.5% to INR 126 crores • Gross Margin Improvement: 29% by year-end, 34% in Q4
Key Developments • New Plants: Addition of three new manufacturing plants • Stock Market Listing: Listed on BSE and NSE • Government Approval: Received for PLI subsidy scheme • Organizational Strengthening: Enhanced structure and experienced board
Market Position and Product Portfolio • Market Position: Third largest in ethnic snacks sector in India • Production Capabilities: Largest manufacturer of Bikaneri Bhujiya • Product Range: Over 300 products with a distribution network in 25 countries • Revenue CAGR: 21.6% over the past five years
Growth Strategies • Product Mix Shift: Increased market share for Namkeen • Expansion Plans: Enhancing manufacturing capacity and marketing initiatives • Local Product Development: Focus on regional tastes
Financial Goals and Sustainability • Return on Equity (ROE) and Return on Capital Employed (ROCE): Aiming for improvements through capital expenditure completion • Gross Margin Target: Increase by an additional 0.5% in FY '24 • Sustainability Focus: Transitioning to green energy
Cost Management and EBITDA Improvement • Cost Reduction Focus: Targeting manufacturing and logistics costs • EBITDA Improvement Goal: Around 0.5% increase • New Plant Costs: Initial high costs with benefits expected by FY25
Regional Growth Focus • Geographic Strategy: Targeting eastern states (Assam, Bihar) and northern Rajasthan for growth • Capacity Utilization: Current at 42-43%, aiming for 65-70% in the coming years
Market Conditions and Competitive Landscape • Gross Margin Insights: Improvements due to efficiencies and commodity price decreases • Advertising Spend: Consistent at around 2% for Q4
Distribution Reach • Outlets: Approximately 9.5 lakh, with significant presence in core states • Growth Potential: 55% numeric distribution in core states, only 4.2% in focus states
Conclusion • Management Outlook: Optimistic about sustaining gross margins and improving capacity utilization while navigating competitive pressures.
Bikaji Foods Q3 FY '23 Earnings Conference Call Summary
Overview of the Company • Conducted on January 27, 2023, for Q3 ending December 31, 2022. • Key management: Deepak Agarwal (Managing Director), Rishabh Jain (CFO), Manoj Verma (COO). • Established in 1993, evolved from Haldiram brand. • Third-largest ethnic snacks manufacturer in India. • Focus on Bikaneri Bhujia and handmade papad. • Operates five manufacturing locations and employs over 5,000 women.
Strategic Expansion • Expansion in core markets: Rajasthan, Bihar, Assam (70-73% of business). • New plants in Guwahati, Muzaffarpur, Kanpur, and upcoming in Patna. • Acquired a plant in Tumkur for Karnataka and Telangana. • Strong distribution network across 25 states and 25 countries.
Financial Performance • 15.6% revenue growth in Q3 year-over-year; ethnic snacks up 21.4%. • Nine-month revenue increased by over 24%. • 195% increase in PAT for Q3; gross margin improved due to lower raw material prices. • Merging Hanuman Agro to streamline operations.
Long-term Growth Strategy • Focus on market-specific approaches, new manufacturing, brand building, and automation. • Targeting double-digit EBITDA margins and improving gross margins to 28-29%. • Plans to increase advertising spend to 2% of sales.
Market Positioning and Competition • Papad business potential in largely unorganized market. • Aiming to double revenue in 3-4 years. • Addressed competition concerns and market differentiation strategies.
Distribution and Growth Plans • IPO raised only secondary funds; strong cash flow for growth. • Targeting an increase in direct reach from 2.6 lakh to 2.5 lakh outlets in two years. • Future growth driven more by volume than price, aiming for mid-teens volume growth.
E-commerce and Q-commerce Strategy • Acknowledged q-commerce as a growth opportunity. • E-commerce and q-commerce account for 8-9% of modern trade business. • Focus on convenience for consumers despite higher shipping costs.
Additional Insights • Current capacity utilization of Hanuman Agro at 30-35%. • Logistics costs around 3.8%, aiming for stability. • Limited franchise operations, focusing on distribution.
Conclusion • The call concluded with an invitation for further questions through their bankers.