Bikaji Foods International Limited

Bikaji Foods reported a strong Q4 FY26 with over 18% top-line growth and a full-year EBITDA margin expansion of 120 basis points to 13.7%. Full-year revenue from operations reached INR 2,994 crores, with volume growth of 9.5%. Q4 volume growth was particularly strong at over 16%, marking the highest in any quarter, contributing to a Q4 EBITDA of INR 88 crores and PAT of INR 56 crores.

The company successfully expanded its distribution network, crossing 3.5 lakh outlets. Key marketing campaigns like 'Bhujia ho toh Bikaji' and 'Kya Baat Hai Ji' significantly boosted the Family pack segment, which grew 20% in Q4. These initiatives, combined with GST reduction, led to 'very significant and good growth' in the overall Namkeen snacks category, with ad spend maintained at approximately 2% of revenue.

Bikaji faced significant raw material inflation, with edible oils rising 12-14% and packaging materials 25-30%. In response, the company implemented an overall price hike of approximately 3% in April 2026 and reduced grammage in Impulse packs. Management believes these actions are sufficient to manage current inflation and aims to maintain gross margins, which stood at 35.6% in Q4 and 35.1% for the full year.

The Ethnic snacks segment showed strong Q4 volume growth of 16%. The Western snacks portfolio, though slower at 8.5% in Q4, is targeted for 20%+ growth to increase its contribution from 8.5% to 11% in the next three years. The THF retail business doubled its revenue to over INR100 crores this year, with ambitious plans for 50-55% annual growth and 8-10 new store openings annually. Exports also crossed INR100 crores for the first time, with Ariba Foods contributing to 50-60% export growth.

To address capacity constraints, particularly in sweets, Bikaji plans a capex of approximately INR100 crores for a new sweet factory in Bikaner, which will solve production issues. A new warehouse, with capex already completed, is expected to be fully operational by mid-June, enhancing supply chain efficiency and supporting seamless production. These investments, along with increased CMU production, are expected to drive operational efficiencies and improve EBITDA.

E-commerce and quick-commerce channels now account for 3% of overall business, up from 2% last year, demonstrating over 100% growth in Q4. Management sees 'huge continued growth' in this channel, driven by inorganic growth (expanding to Tier 2 cities) and increased SKUs. The company is exploring new categories and premium offerings to sustain this momentum, especially as growth in metro towns shows signs of stagnation.

The company experienced temporary disruptions in Q1 FY27 due to the unfortunate passing of its Chairman, leading to a 2.5-3 day factory shutdown. Additionally, the Bengal elections caused labor movement and a 4-4.5 day production loss. Despite these, management expects overall momentum to continue, with efforts underway to cover the lost production.