Bikaji Q1 FY27: Steady growth, better gross margins, and a festive season build-up

Bikaji Foods International reported a steady start to FY27, with consolidated revenue from operations of INR 7,343 million in Q1 FY27, up 12.5 percent year on year. Volume grew 7.7 percent, indicating that growth was not purely price-led. Profitability was mixed. Gross margin expanded to 35.7 percent, up 70 basis points year on year, but EBITDA margin fell to 13.5 percent, down 130 basis points year on year. EBITDA rose 2.8 percent to INR 990 million, while PAT increased 1.6 percent to INR 595 million.

Management described the quarter as a “story of two halves”. According to the CFO, the first 45 days saw supply and production disruptions linked to a short plant impact across locations due to the passing of the Chairman, and labor dislocation during the Bengal elections. After that period, management said demand improved across product ranges, and June and July saw better momentum.

What drove the quarter: product categories and mix

Ethnic snacks continued to dominate the revenue mix and remained the anchor of the portfolio. In Q1 FY27, ethnic snacks revenue was INR 5,153 million, up 11.4 percent year on year, and represented 75.7 percent of mix. Western snacks stood out as the fastest growing segment. Revenue rose 21.3 percent year on year to INR 684 million, and the mix increased from 9.2 percent in Q1 FY26 to 10.1 percent in Q1 FY27.

Packaged sweets grew 4.4 percent year on year to INR 426 million and represented 6.3 percent of mix. Papad declined 6.5 percent year on year to INR 331 million, with management attributing the decline to early monsoon and the production constraints of a largely handmade process. The “others” category remained small in the disclosed category table.

Core markets stayed steady, focus markets did the heavy lifting

The company’s market commentary continues to separate India into core and focus markets. In Q1 FY27, core markets grew 10.8 percent to INR 4,927 million, maintaining 72.4 percent of the mix. Focus markets grew faster at 18.9 percent to INR 975 million, increasing mix to 14.3 percent from 13.3 percent.

On the call, management highlighted Uttar Pradesh as a key growth driver within focus markets and stated that UP delivered about 37 percent growth in the quarter. This is consistent with the company’s positioning that focus states are the primary engine for incremental growth because core states already have higher market share.

Exports were the only geography that declined. Export revenue was INR 290 million, down 2.2 percent year on year. Management attributed this to tariff-related uncertainty in the US and to freight and container availability issues. They noted that freight costs had increased about three times compared with a few months earlier.

Margins: gross margin strength, but costs and festive marketing weigh on EBITDA

While gross margin improved, management acknowledged multiple cost pressures below the gross margin line. The CFO cited coal price inflation impacting manufacturing costs by around 40 basis points, and higher advertising and sales promotion investments that also created a 40 to 50 basis points impact.

The company also provided useful context on raw material inflation. The presentation included sensitivity indices showing edible oil rising to 1.63 in Q1 FY27 versus a 1.00 base in Q2 FY23-24, indicating continued inflationary pressure in a key input. Management also referenced rising prices in pulses such as moth dal and chana dal.

On pricing actions, management stated that two price increases were taken in the last few months, including an MRP increase in April. However, they also indicated an intention to maintain prices till Diwali due to the festive season and gifting focus, unless a major disruption occurs.

For FY27, the CFO guided for an EBITDA margin of 13 to 13.5 percent, including PLI, and noted that advertising will be heavier in the next two quarters because the company is entering key festive periods.

Execution priorities: reach expansion, supply chain resilience, and selective international moves

Distribution expansion remains a central theme. The company reported direct coverage at 3,70,000 plus outlets by the end of the quarter and stated overall total reach of 14.46 lakh outlets as on 30 June 2026. Management repeatedly linked reach growth to its ability to scale in focus markets.

Supply chain resilience also featured prominently due to the quarter’s disruptions. Management discussed an ASRS investment at Bikaner that was not live during the quarter. They described about 1 lakh square feet of construction and a plan to add storage for an incremental 1.2 to 1.3 lakh cartons, aimed at easing supply chain operations and maintaining minimum stock levels.

On international expansion, management spoke about a Nepal joint venture where both parties will invest INR 15 crores each. The plant, located between Birgunj and Kathmandu, is expected to start in 8 to 9 months from the call date. The stated rationale was to enable local production and save import duties, improving competitiveness.

In retail, management said the focus is on THF format and mentioned plans to open close to 10 stores this year. The presentation showed retail revenue from operations of INR 364 million in Q1 FY27 and store count of 28.

Takeaways from Q1 FY27

Bikaji’s Q1 FY27 showed steady demand and volume-led growth, alongside a clear improvement in gross margin. The quarter was, however, affected by operational disruptions and a rise in input and operating costs, which limited EBITDA margin expansion.

The next two quarters are positioned as a festive-season opportunity, supported by higher marketing investments. Management’s guidance of 13 to 13.5 percent EBITDA margin for FY27, including PLI, frames expectations conservatively given the stated cost pressures and higher advertising intensity. Investors will likely track three items closely: the durability of focus-market momentum, the company’s ability to manage edible oil and pulse inflation without further price hikes, and whether the supply chain initiatives reduce vulnerability to localized disruptions.