Bikaji Foods Q3 Results Review: Dolat Capital Upgrades Rating To 'Buy', Revises Target Price — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Bikaji Foods International Ltd.’s Q3 FY25 profitability came below our estimate. Revenue grew by 14.5% YoY to Rs. 7.1 billion with 3.0% volume growth. Nonetheless, excluding the consumer offers of 10% extra on traditional snacks in the base quarter, volume growth was 7.9%.

We believe that volume growth will be the primary driver of revenue growth in the near term.

Due to inflationary pressure on raw material, gross margin contracted by 260bps to 29.0%. To mitigate raw material inflation, Bikaji implemented selective price increases. However, higher operating expenses led to a 430bps contraction in Ebitdam to 7.8%.

We have downward revised our FY25/26/27E EPS estimates by 26.3/8.3/8.7% to Rs 8.3/12.2/14.7 to factor in Q3 performance and elevated commodity prices which are likely to impact next three-four months performance. However, we believe that the margins would normalize with price hikes and resurgence of volume growth.

Given recent fall in the stock price (24% since our last report), we upgrade our rating to ‘Buy’ with revised target price of Rs 811 valuing at 55 times FY27E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.