Bikaji Foods Q2 FY26 Profit Rises 13.5%, Eyes Double-Digit Growth

Introduction

Bikaji Foods International Ltd. announced a robust financial performance for the second quarter of fiscal year 2026, demonstrating resilience amid market adjustments. The company reported a 15.2% year-on-year (YoY) growth in consolidated revenue from operations, reaching ₹830.3 crore. Profit After Tax (PAT) increased by 13.5% YoY to ₹77.7 crore, underscoring strong operational efficiency and demand for its products.

Detailed Financial Performance

The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 20.1% YoY to ₹128.2 crore. The EBITDA margin improved to 15.4%, an increase of 130 basis points compared to the same period last year when excluding Production Linked Incentive (PLI) income. This margin expansion highlights effective cost management and a favorable product mix. On a quarter-on-quarter basis, revenue saw a significant 27.2% increase, while net profit grew by 32.7%, reflecting a strong recovery and seasonal demand.

Segment Performance Analysis

Bikaji's diverse product portfolio showed varied performance during the quarter. The Packaged Sweets segment was the primary growth engine, recording a substantial 32.3% YoY increase. This surge was partly attributed to an earlier Diwali season, which shifted some festive sales into the second quarter. The Exports business also delivered an exceptional performance, with revenue growing by 77.3%, indicating rising global acceptance of the company's products. The core Ethnic Snacks segment grew by a modest 4.6%, while the Papad category saw a healthy 10.3% growth. In contrast, Western Snacks experienced a 5.2% decline, a segment where the company took a conscious decision to protect margins amid rising input costs.

Navigating GST Headwinds

The quarter was not without its challenges. The government's decision to reduce the GST rate on packaged snacks from 18% to 12% created a temporary disruption in the supply chain. In anticipation of the price reduction, distributors engaged in de-stocking during September, which impacted sales in the company's core markets. Deepak Agarwal, Managing Director of Bikaji Foods, noted that excluding this one-time effect, the salty snacks business would have achieved high single-digit growth. He confirmed that demand has since normalized, and the company is witnessing a healthy uptick in sales momentum post-transition.

Exports and International Expansion

International markets remain a key focus area for Bikaji. The company is actively strengthening its global footprint, particularly in the United States. It plans to invest an additional $100,000 in its subsidiary, Bikaji Foods International USA Corp, to bolster its distribution network and support business partners. With exports already contributing significantly to growth, the company projects this momentum to continue, targeting upwards of 40% export growth over the next few years.

Domestic Strategy and Distribution

On the domestic front, Bikaji is concentrating its efforts on high-consumption regions. Uttar Pradesh has been identified as a key focus state, with a new marketing campaign launched to capture a larger market share. The company aims for 25% or more year-on-year growth from this market. Furthermore, Bikaji is expanding its distribution network, with a target of reaching 3.5 lakh outlets by the end of the fiscal year and a longer-term goal of 5 lakh outlets over the next three years.

Strategic Initiatives and Acquisitions

To support its growth ambitions, Bikaji is pursuing strategic acquisitions. The company's board has approved the acquisition of an additional 48.78% stake in Petunt Food Processors Private Limited (PFPPL), which will make it a wholly-owned subsidiary. This move is expected to enhance production capabilities and market reach. Additionally, the company benefits from a government-granted PLI scheme amounting to ₹261 crore, which will reduce the need for significant capital expenditure over the next two to three years. Current capacity utilization stands at approximately 52%, providing ample headroom for future growth.

Management Outlook and Guidance

The management team remains confident about the company's future prospects. They have reiterated their guidance for mid-teens revenue growth for the full fiscal year 2026, aiming for approximately 15%. Operating margins are expected to remain stable around the 15% mark. Chief Operating Officer Manoj Varma also clarified that recent promoter share sales were solely for establishing a family office and that no further dilutions are planned for now, providing reassurance to investors.

Conclusion

Bikaji Foods International's Q2 FY26 results reflect a company that is successfully navigating market dynamics while executing a clear growth strategy. Strong performance in the sweets and export segments, coupled with strategic expansion plans and a positive outlook from the management, positions the company well for sustained, long-term growth. As it continues to innovate and expand its reach, Bikaji remains a key player in the competitive Indian FMCG sector.