Ganesh Consumer Products Q1 FY27 earnings call

Ganesh Consumer Products faced a challenging operating environment in Q1 FY27, resulting in a 7.1% year-on-year decline in revenue from operations to ₹188.5 crores. This was primarily attributed to an extended heatwave, constrained LPG availability, benign wheat prices, and disruptions from assembly elections across Eastern India. Despite these headwinds, the company's B2C business showed relative resilience with a 4.1% YoY decline, while the B2B segment saw a steeper 17.9% YoY decline due to softer B2C volumes and a strategic reduction in exposure to lower-margin volumes.

Despite the revenue decline, Ganesh Consumer Products achieved its highest-ever EBITDA margin of 11.2% in Q1 FY27, marking an improvement of 66 basis points YoY and 313 basis points sequentially. This margin expansion was driven by disciplined procurement during a favorable commodity cycle, an enhanced product mix focusing on value-added offerings, and focused cost optimization initiatives. Profit after tax (PAT) also saw significant growth, increasing by 31.4% YoY to ₹12.5 crores, with the PAT margin expanding by 191 basis points YoY to 6.6%.

The company is actively evolving its product mix, with value-added and emerging products now constituting 68% of its B2C revenue. This shift is reinforced by healthy gross margin improvements in the spices segment due to better realizations. Ganesh Consumer Products is expanding its portfolio with a soft launch of an ethnic snacks range and plans for a wider rollout later in FY27. A new packaged sweets category is expected to launch in Q3 FY27, manufactured at the Amta unit, and distribution of soya chunks has commenced, extending its value-added protein offerings.

Ganesh Consumer Products demonstrated competitive strength by increasing its overall market share by 1% in the packaged wheat-based category and improving weighted distribution by 1%. The company plans to onboard 300-400 new distributors over the next 2-3 years, focusing on new geographies like Bihar, Jharkhand, Odisha, and Northeast, and supporting new product portfolios. Revenue from outside West Bengal is targeted to increase from the current 7-8% to 18-20% within the next 2-3 years.

The company maintains a strong balance sheet with a net cash position of ₹17.2 crores. Return ratios remain healthy, with an annualized ROCE of 18% and ROE of 13.3%. The cash conversion cycle stood at 43 days, reflecting an inventory build-up from stepped-up procurement. However, the commissioning of the Sattu and Besan manufacturing facility, funded by IPO proceeds, is delayed and now expected towards the end of FY27-28 due to global supply chain disruption^🌐s and geopolitical headwinds^🌐.

For FY27, Ganesh Consumer Products is targeting a volume growth of 7-8% and an EBITDA margin in the range of 9.8-10%. The masala category is projected to contribute 11-12% of revenue in the next three years, up from 6-7% currently. The atta mix is expected to remain stable at 30-34% in coming quarters, with value-added and emerging segments driving future growth. The HoReCa segment, impacted by LPG crunch in Q1, is anticipated to normalize by the end of Q2 FY27.