CMP: ₹716.75
Bikaji Meals Worldwide’s Q1-FY25 administration commentary reassured us on the topline trajectory, however margin outlook for FY25 seems to be bland. The administration is aiming for 13-15 per cent quantity progress for FY25, and expects product costs to extend by about 2-3 per cent. Return of rural demand is prone to support total demand restoration, with focus of Western snacks being excessive. Bikaji has already achieved growth to 21k retailers, of its FY25 distribution growth goal of 50k retailers.
Key raw-material costs (significantly of channa, potato, and dry fruits) have been secure y-o-y, however seen inflationary strain sequentially, which is prone to persist for the remainder of the 12 months. Bikaji effected 70-80bps value hikes in Q1, and is mulling a 150bps price-hike in Q2, to move on the impression of sequential inflation in key uncooked supplies.
Bikaji stays an execution-led, savory snacks play, whereby it has created a relative edge over friends. This displays in its efficiency and can also be being step by step baked into valuations (54.5x P/E for FY26, on PLI adj. EPS of ₹13.1). As we lower our margin assumptions, our earnings estimates cut back 2-3 per cent over FY25-27. We keep our Add score on Bikaji, with new Jun-25E TP of ₹760/sh (vs ₹775/sh earlier), on 55x P/E
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