Bikaji Foods International strategises for sustainable growth in evolving food industry

Bikaji Foods International in focus: In a recent interaction with brokerage firm JM Financial, Bikaji Foods International's Managing Director, Deepak Agarwal, shared the company's strategic vision to transition from a packaged snacks to a broader foods company. 

Stressing upon a methodical approach, the New Delhi-based company aims to leverage its existing strengths while expanding into complementary categories such as sweets and frozen foods, where it can deliver value.

Key pillars of the strategy include providing value for money to consumers, focusing on higher-priced family packs, and continuous investment in brand building and service excellence across channels, the brokerage firm noted. 

With a targeted gross margin threshold of around 31 per cent, Bikaji aims to protect and enhance margins through product mix optimisation and improved utilisation levels, targeting a 75 per cent utilisation rate over the next three years.

Despite operating in a competitive market with established players like Haldiram and Balaji, Bikaji has demonstrated strong growth in its focus markets, driven by robust brand equity and strategic investments in distribution and service quality enhancements. 

Furthermore, the company also aims to fortify its presence in core markets while simultaneously gaining and sustaining market share in focus regions.

With major capital expenditures completed, Bikaji is set to improve earnings before interest, taxes, depreciation and amortisation (EBITDA) margins and enhance returns on equity and capital employed. 

The management's focus on execution and strategic alignment with market dynamics positions Bikaji Foods International for continued success and market leadership. 

Therefore, JM Financial reiterates a ‘buy’ recommendation, with a target price of Rs 600 per share.

As of 11:03 am, shares of the company were trading nearly 3 per cent lower at Rs 511.40 per share.