Geojit IPO report on Bikaji Foods International
Bikaji Foods International Ltd (BFIL) is the 3rd largest ethnic snacks company in India with an international footprint, selling Indian snacks and sweets, and is the 2nd fastest growing company in the Indian organised snacks market. Incorporated on 1995 at Bikaner in Rajasthan, BFIL has market leadership in the ethnic snacks market in Rajasthan, Assam and Bihar. The company has operations across 23 states and four union territories and is also exporting products to other countries. In the six months ended June 30, 2022, the company sold more than 300 products under the Bikaji brand. India’s packaged food business is currently valued at ₹4,240 billion and is estimated to grow at a CAGR of 8% in the next five years to reach ₹5,798 billion. Indian savoury snacks market is valued at ₹751 billion in 2022 and is expected to reach ₹1,227 billion by 2026 at a CAGR 13%. BFIL has a track record of three decades in the Indian snacks industry, and the company has grown its sales at a CAGR of 22% and its EBITDA and PAT increased at a CAGR of 21% and 16%, respectively, between FY20 and FY22, while maintaining healthy profitability.
Valuation and Outlook
At the upper price band of ₹300, BFIL is available at a P/E of 98.5x (FY22), which appears expensive compared to its peers. Considering its consistent top-line growth, industry leading position, future expansion plans, new product launches, investments in strengthening the brand recall and good future prospects for the packaged food business, we assign a “Subscribe” rating on a short -term basis for high-risk investors.
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