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Bikaji Foods International – "Amitji loves Bikaji" but should you invest?

Updated: Sep 21, 2023

Company Name – Bikaji Foods International Limited (Bikaji)

Current Share Price – INR 415 (June 14, 2023)

Market Cap – INR 10,365 cr


1. What is interesting about the stock?

In the colorful state of Rajasthan, the Khandelwal family shared a deep passion for bhujia, a crunchy and delectable snack. Bhujia is a versatile snack, complementing all kinds of dishes including poha and every meal.

The family would sit together, their hands covered in bhujia, enjoying each other's company, laughter, and conversation filling the room. The kids even developed a taste for it as young as one year old, unlike other kids who shy away from spicy food.

As time went by, the family moved away from India but carried on the tradition. Their love for bhujia remained unwavering. It became a symbol of love and togetherness, reminding them that simple moments and cherished customs have the power to create lifelong memories.

Story of my life and most families from Rajasthan.

Amitji loves Bikaji. We love both Amitji and Bikaji.

But should you invest in Bikaji? A tough battle between Mind and Heart!!

Bikaji Foods International Limited is a prominent Indian snacks and sweets company with a global presence, ranked as the third largest in its category.

The Company's success is attributed to its unique take on traditional Indian snacks by combining contemporary flavors while still retaining the regional tastes that cater to the ever-evolving preferences of consumers in India and abroad. The production capacity of the Company is:

The brand has achieved dominance in the ethnic snacks market in key states such as Rajasthan, Assam, and Bihar. Over the years, it has expanded its market reach and is now present across India.

In the fiscal year 2023, Bikaji Foods International Limited exported its products to 25 countries worldwide, including North America, Europe, the Middle East, Africa, and Asia Pacific.

Bikaji offers six primary product categories, including bhujia, namkeen, packaged sweets, papad, western snacks, and other snacks such as gift packs, frozen food, mathri range, and cookies.

The Indian Savory Snacks market is estimated to be worth INR 75,100 crore in 2022 and is projected to grow at a CAGR of 13% to reach a value of INR 1,22,700 crore by 2026. The market can be broadly divided into two segments - traditional snacks and western snacks. Traditional snacks, which include namkeens, bhujia, and ethnic snacks like dry samosas, kachoris, and chaklis, account for 48% of the total savory snacks market with a value of INR 36,600 crore. Meanwhile, the western snacks market, which includes chips, extruders, and "bridges" - a new variety of snacks with a fusion of local and western flavors - is valued at INR 38,500 crore in 2022.

Snacking in between meals has always been a popular practice in Indian culture, and the COVID-19 lockdown has further increased this trend, driving the growth of the industry.

The Indian savory and snacks market is characterized by a large number of unorganized players (accounting for approximately 44% of the market) across different product segments. Small companies typically cater to specific regions, offering a limited range of products, often traditional snacks. On the other hand, organized players such as Haldiram, Pepsico-Lays, Balaji, and Bikaji have a strong presence across the country and hold significant market share in regional pockets.

Why invest in Bikaji?

  • Strong brand

  • Experienced promoters and management team

  • Diverse product portfolio

  • Robust distribution network

  • Increase in share of organized players in the Indian savory and snacks market

2. Key Historical Financials

  • Company revenue and net profit have grown at a CAGR of 20% and 19% respectively in the last 5 years

  • Revenue growth was 22% in FY23 on a YoY basis but was 15% in Q4FY23

  • EBITDA margin has been between 9-11% during FY20-23. Margin has expanded to 13% in Q4FY23 as the raw material & packaging material prices softened

  • Cash flow conversion (CFO/EBITDA) was 83% in FY23

  • ROCE and ROE were 18% and 14% respectively in FY23 – not high for a brand focused Company

3. What is my view on company valuation?

Bikaji made its debut on the NSE and BSE on November 16, 2022, via a successful IPO at INR 300 per share. The shares opened at INR 322.8 on the NSE. IPO was subscribed to ~27x. The current share is ~40% higher than the IPO price.

The Company has a P/E (TTM) ratio of 81x, while the EV/EBITDA ratio is ~47x.

Valuation looks steep as the growth could be 10-15% and the return ratios are not high. The competitive environment in the industry is also very high.

It would be prudent to wait for the stock price to fall – I may still buy 1 share of the Company as a souvenir and to show support.

4. What are the risks to the investment analysis?

Risks to the analysis are:

  • Competitive intensity in the industry is high

  • Gross margins in the last 3 years have been under pressure due to high raw material & packaging material prices

  • Sales are concentrated in a few states


About the Author

I have over 17 years of experience in venture capital, private equity, and investment banking across various sectors in India and the Middle East. I was last working with Majid Al Futtaim Holding (MAF), a leading conglomerate in the Middle East, to look after investments, M&A, and venture capital. I have prior experience in India with Tata Capital (Private Equity), Merrill Lynch (Investment Banking or IB), and Ambit Corporate Finance (IB). I bring the long-term ownership mindset to the analysis.

I graduated from the MBA program of the Indian Institute of Management Lucknow (2005) after completing the Bachelor of Technology program at the Indian Institute of Technology, Kharagpur (2002).

I am an Insignificant Investor in the public market and co-founder of SocInvest.


I have no stock, option, or similar derivative position in any of the companies mentioned in the last 30 days, and shall not initiate any such positions within the next 5 days. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from SocInvest). I have no business relationship with any company whose stock is mentioned in this article.

I am not a SEBI registered advisor. This article is purely for educational purposes and is not to be construed as investment advice. Please consult your financial advisor before acting on it.

I have used publicly available information while writing this article.



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