Bikaji Foods International (BIKAJI) Q2 26/27 earnings summary

Executive summary

• Q2 revenue from operations reached INR 93,852.76 lakh, up 13.0% YoY; volume growth was 5.0%, while EBITDA and PAT declined amid cost and marketing pressures.

• H1 revenue from operations was INR 1,67,278.64 lakh, up 12.8%; EBITDA fell 3.0% and PAT fell 6.0% YoY.

• Diwali shifted from Q2 last year to Q3 this year, deferring sweets and gifting sales; management views Q2 and Q3 together as the more meaningful comparison.

• October demand was encouraging across general trade, modern trade and other channels; FY growth guidance was ~17%.

• The board approved unaudited Q2 and H1 standalone and consolidated results; auditors' limited reviews identified no material misstatement.

Financial highlights

• Q2 gross profit rose 11.2% YoY to INR 3,231 Mn; gross margin contracted 60 bps to 34.4%.

• Q2 EBITDA was INR 1,187 Mn, down 7.4% YoY; margin fell 280 bps to 12.6%, with higher marketing and fuel costs weighing on results.

• Q2 PAT was INR 690 Mn, down 11.2% YoY; basic EPS was INR 2.82 versus INR 3.18.

• H1 gross margin was flat at 35.0%; EBITDA margin fell to 13.0% from 15.1% and PAT margin to 7.7% from 9.2%.

• Management cited a ~1.7 percentage-point standalone core-snacking gross-margin hit; consolidated gross-margin impact was ~0.6% amid higher operating costs.

Outlook and guidance

• FY growth outlook is ~17%; H2 growth was described as high teens to 20%+, with focus markets expected to grow 20%-23%.

• Q3 margins are expected to remain pressured; Q4 is expected to normalize, with ~13.5% EBITDA and a 13%+ exit run-rate.

• A 3%-3.5% price increase takes effect from ~November 15; no major further increase is expected through March absent a material change in conditions.

• Combined Q2 and Q3 sweets growth is expected to exceed 10% through YTD December.