Bikaji Foods International Ltd. - It stands as a prominent player in India's ethnic snack market, boasting a strong global presence and rapid growth within the country. Aspiring to be a dominant force nationwide, it holds the title of the world's largest producer of Bhujia, the second-largest manufacturer of homemade papad, and a key player in packaged sweets like Rasgulla and Soan Papdi.
Wide product-base - With 300+ options in Bhujia, Namkeen, Sweets, Papad, Western Snacks, and Others. Bikaji leads in Namkeen sales, followed by Bhujia and Sweets.
Revenue Growth - FY23 saw a 22% revenue boost, led by substantial sales growth in Ethnic Snacks (20%), Packaged Sweets (17%), Western Snacks (79%), and Papad (16%).
Geographical Presence - The company's robust distribution and supply chain covers 25 states and 4 union territories in India. Globally, strategic partnerships reach 25+ countries across North America, Asia Pacific, the Middle East, Europe, Africa, and the UK.
Key Stakeholders - With Amitabh Bachchan as its Brand Ambassador and support from private equity funds like Avendus, Axis Asset Management, and others, the company collaborates with PVR Cinemas, Paytm, and recent Bollywood movies (Phone Bhoot and Jugjugg Jeeyo).
Investment Thesis - The company exhibited an impressive 22% revenue surge and a 67% increase in net income from FY22 to FY23, attributed to operational efficiencies and a strategic stake acquisition, in line with ambitious growth plans. The recent acquisition of a 49% stake in Bhujialal is a positive step for expansion. The company's profit margins also improved from 11% to 14%. However, the strategic focus on tier-II and tier-III cities requires careful consideration of evolving consumer trends and market dynamics for investment decisions. Despite appearing somewhat overvalued in comparison to peers, indicated by the company's P/E ratio ranging between 70-100 (compared to the industry's 40-60) and an EV/sales ratio of 6.2 against the industry's 2.44, and facing competition from established brands like Haldiram, the company's ambitious expansion plans and its established position as a key player in ethnic snacks suggest a promising trajectory for future growth. However, a comprehensive analysis of growth strategies, market trends, and financial metrics is advisable.
Investors Return - Before going public, our analyst while evaluating the company recommended an investment price of Rs. 280. The IPO opened at Rs. 323, and the current market price ranges from Rs. 530-550, yielding over 2x returns for our investors.