Bikaji Foods posts strong Q4FY25, CFO signals continued growth in high-margin products

Bikaji Foods International Ltd reported resilient fourth-quarter results, with company executives expressing confidence in their strategy of focusing on high-margin products while maintaining their strong position in traditional snacks.

In a conversation with analysts today, Bikaji’s management outlined their approach to sustaining the growth momentum seen in Q4FY25. The company’s financial performance exceeded market expectations, particularly in gross margins, which improved sequentially due to price hikes and moderation in certain key input costs.

“The results are well in line with what we have thought for. After a weak Q3, where the overall microeconomic factors were also adverse, the way we have turned around, I think the team has done a commendable job,” said Manoj Verma, Chief Operating Officer of Bikaji Foods.

The company’s flagship product segments remain the key profit drivers. “Bhujia and Namkeen are high in profitability, and they contributed the most in overall profitability of FY25,” said Rishabh Jain, CFO. “Overall, the contribution of Bhujia and Namkeen is close to 70 per cent”

Management highlighted their strategic approach to dealing with previous challenges in the Western Snacks category, which had experienced negative growth in Q3. “That was a conscious call we took because it was a bottom line eroding proposition… Now what we did was the prices softened and in this quarter if you look at, we have again bounced back with a double digit growth,” explained Verma.

The company maintains a strong position in its core markets while pursuing expansion. “Rajasthan, Assam and Bihar, the three are core markets where we are running leadership positions. And our major focus is to go in-depth in all the three markets,” noted Jain.

On exports, which grew by over 16.2 per cent, Jain identified key markets: “US, UAE, Canada, these three are a core market where we are having very good sales numbers.” The company expects robust growth in its export segment, with Jain projecting “25 per cent plus growth in the next three years.”

Regarding raw material concerns, management expressed confidence about the near-term outlook. “Next two, three quarters, I don’t see any risk because right now, inflation is in control,” Jain stated. “Edible oil, of course, it was a risk in quarter three, which has impacted the gross margin. But currently, we don’t see any major risk…”

The company has been proactive in its marketing approach, investing significantly in brand visibility. “We spent close to about 2 per cent in our ATL [above-the-line advertising],” said Verma, citing initiatives like the “Bikaji Khao London Jao” promotion.

Looking ahead, Bikaji is focusing on margin improvements through strategic purchasing and product mix optimization. “We have started building a lot of efficiency in purchase. Like previously, we were doing spot purchase. Now we started doing long-term purchase to have long-term sustainability in gross margin,” explained Jain. “We also started focusing on few products which are high in gross margin.”

JM Financial has maintained a “Buy” rating on Bikaji with a target price of ₹790, noting that while sales and EBITDA delivery exceeded estimates, higher depreciation led to a 4 per cent cut in estimates for FY26/27E. The brokerage believes Bikaji’s brand strength positions it well to navigate challenging market conditions and accelerate when demand conditions improve.

The shares of Bikaji Foods International Ltd were trading at ₹714.80 down by ₹2.85 or 0.40 per cent on the NSE at 1.55 pm.

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Published on May 19, 2025