Bikaji Foods’ share price surged nearly 4% to hit a 52-week high in early trade on Friday following Nuvama Institutional Equities’ initiation of coverage on the stock. The shares rallied as much as 3.91% to ₹747.95 apiece on the BSE.
Bikaji Foods International is a significant player in the rapidly growing Indian savoury snacks market. It holds the position of the third-largest player in the organized ethnic snacks market, is the market leader in family packs, and leads in its core states: Rajasthan, Assam, and Bihar.
Nuvama Equities initiated coverage on Bikaji Foods with a ‘Buy’ rating and a target price of ₹885, indicating a 23% upside potential from Thursday’s closing price.
The demand for savoury snacks is rising due to shifting consumer preferences and the growing popularity of ethnic snacks. Additionally, the consolidation of the unorganized sector is expected to fuel Bikaji’s growth in the coming years, according to Nuvama Equities.
Overall, Bikaji Foods is well-positioned for growth due to its wide product range. The company aims not only to maintain its leadership but also to increase its market share in its focus states to high single digits from the current 1–2%. With most capital expenditures already made, increasing asset utilization is expected to boost its RoCE to 32% by FY27E. The growing market for savoury snacks, strong brand equity, favorable trends, and expansion plans make Bikaji Foods an attractive investment, according to Nuvama.
The Indian savoury snacks market is projected to grow at a CAGR of 11% to ₹1.2 lakh crore over FY24–27E. Nuvama Equities believes Bikaji Foods is set to outpace the industry with an 18% CAGR over FY24–27E, driven by annual volume growth of 14–15%.
The company is expected to implement 2–4% price hikes going forward. Nuvama forecasts an EBITDA CAGR of 23%, leading to an EBITDA margin of 15% in FY27E (excluding PLI benefits). Additionally, PLI benefits are anticipated to aid EPS growth (21% EPS CAGR over FY24–27E). Ethnic snacks contribute the most to revenue (69%), followed by sweets (12%).
Bikaji Foods’ share price has seen a significant rally, gaining over 36% in one month and more than 77% in the past year. At 9:50 am, Bikaji Foods shares were trading 1.13% higher at ₹727.85 apiece on the BSE.
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