Shares of Bikaji Foods International (Bikaji) experienced a sharp rally on February 19, 2025, surging 20% to ₹679 on the Bombay Stock Exchange (BSE) in intraday trade, driven by heavy volumes. This significant upward movement follows a 31% recovery from its recent low of ₹520, recorded during Tuesday’s intra-day trade.
Despite this rebound, the stock had corrected 29% in the last eight trading sessions (February 6–February 18), reflecting a volatile phase. The stock had previously hit an all-time high of ₹1,005 on September 27, 2024. At 2:37 PM, Bikaji was trading 18% higher at ₹667.30, contrasting with the 0.19% decline in the BSE Sensex. The stock witnessed a near-doubling of its average trading volumes, with a combined 1.5 million shares changing hands across the NSE and BSE.
This article delves into Bikaji’s market performance, financial outlook, recent earnings, and growth potential in light of these market developments.
Company Overview
Bikaji Foods International is India’s third-largest ethnic snacks manufacturer and the second-fastest-growing company in India’s organized snacks market. The company is known for its extensive product range, covering six key categories:
- Bhujia
- Namkeen
- Packaged sweets
- Papad
- Western snacks
- Other snacks (including gift packs, frozen food, mathri, and cookies)
Bikaji has a strong presence in the global market, exporting its products to 25 international destinations, including North America, Europe, the Middle East, Africa, and Asia-Pacific.
The company’s Traditional Snacks category remains the biggest contributor to its revenue, accounting for 62% of total sales, followed by Packaged Sweets (18%).
Stock Price Performance
Bikaji’s stock has witnessed a rollercoaster ride in recent months:
- September 27, 2024: All-time high of ₹1,005
- February 6-18, 2025: 29% correction
- February 18, 2025: Stock drops to ₹520 (Intraday low)
- February 19, 2025: Stock surges 20% to ₹679 in intraday trade
- Current Price (as of 2:37 PM): ₹667.30 (+18%)
The recovery in Bikaji’s stock price aligns with the company’s fundamental strength and long-term growth outlook, despite near-term challenges.
Financial Performance: Q3 FY25 Earnings Analysis
Bikaji’s latest financial results for the October-December 2024 quarter (Q3FY25) revealed a decline in profitability, impacted by higher operational expenses and inflationary pressures.
Key Highlights of Q3FY25:
-
Profit After Tax (PAT):
- ₹27.8 crore, down 39.6% year-on-year (YoY)
- Down 59.5% quarter-on-quarter (QoQ)
-
Revenue from Operations:
- ₹714.90 crore, down 0.09% YoY
- Flat growth compared to Q3FY24
-
Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA):
- Down 26.0% YoY
- Down 48.0% QoQ
- EBITDA Margin: 7.8%, compared to 14.8% in Q2FY25 and 12.0% in Q3FY24
-
Production Linked Incentive (PLI) Income:
- ₹17.5 crore booked under the government’s PLI scheme
Reasons for Earnings Decline
- Inflationary pressures on raw materials:
- Edible oil, potatoes, and besan prices surged.
- Unable to fully pass on cost increases to consumers.
- Volume growth slowed to 3% compared to a mid-teen growth trend in previous quarters.
- High promotional base in Q4FY25 is expected to keep volume growth muted.
Bikaji’s deliberate strategy to limit sales to protect margins also impacted Q3 growth.
Market Outlook and Analyst Ratings
Despite a weak Q3FY25, analysts remain optimistic about Bikaji’s long-term growth, citing resilient demand, pricing actions, and recovery in gross margins.
Key Insights from Analysts:
-
Emkay Global Financial Services:
- Sees value growth recovering in Q4FY25.
- Expects price hikes to offset raw material cost pressures.
- Predicts normalization of employee costs in FY25 after high ESOP-related expenses.
-
Stock Valuation & Target Price:
- Current P/E Ratio (FY27E): 46x
- New 12-month target price: ₹725 (previously ₹780)
- Basis for valuation: 60x P/E (cut from 65x) due to margin pressures.
Growth Drivers for Bikaji
1. Strong Market Position
- Well-established brand in India’s ethnic snacks market.
- Expanding product portfolio with newer snack categories.
2. International Expansion
- Exports to 25 countries.
- Growing demand for Indian ethnic snacks worldwide.
3. Pricing Actions & Cost Management
- Expected price hikes in the coming quarters.
- Cost normalization in FY25 after ESOP-related expenses in Q3.
4. Festive & Seasonal Demand
- Q4FY25 sales could benefit from seasonal promotions.
- Volume growth is expected to recover in FY26.
Risks and Challenges
1. Inflationary Pressures
- Rising raw material prices (edible oil, potatoes, besan).
- Impact on gross margins if not offset by price hikes.
2. Slower Volume Growth
- Q4FY25 volume growth expected to remain muted due to high promotional base.
3. Competitive Landscape
- Increased competition from local and global brands in the organized snacks segment.
- Need for continued product innovation to maintain market share.
Conclusion
Bikaji Foods International has demonstrated resilience amid short-term challenges, recovering 31% from its recent low while maintaining a strong long-term growth outlook.
While inflationary pressures and margin contractions impacted Q3FY25 earnings, analysts expect pricing adjustments and cost normalization to drive value growth recovery in the coming quarters.
With strong brand positioning, expanding international reach, and potential for volume recovery, Bikaji remains an attractive bet for long-term investors.
Despite the 29% correction in the past eight sessions, the stock is now rebounding, and analysts maintain a ‘Buy’ rating with a target price of ₹725. Investors will closely watch Q4FY25 performance and margin recovery trends to gauge the company’s future prospects.
