Buy Bikaji Foods International; target of Rs 650: Emkay Global Financial

Emkay Global Financial is bullish on Bikaji Foods International has recommended buy rating on the stock with a target price of Rs 650 in its research report dated May 24, 2024.

We continue to see Bikaji as a fast growing savory snacks player with strong brand imagery and better price-pack mix. Management’s thrust on category development efforts in the core states, and share gain strategy in focus states is likely to support growth. We build in 17% revenue CAGR over FY24-26E, with 14-15% volume growth. We see growth with profitability as key for Company, where multiple levers are in place to drive steady margin expansion. Adjusted for PLI benefits, we believe earnings CAGR will clock 33% over FY24-26E. Its QSR aspiration remains an optionality, with accumulation of cash (div. payout at 9% for FY24, to expand to 25%) to aid its M&A aspirations. 

We maintain BUY with Mar-25E TP of Rs650 on 48x P/E. Its Q4 result stood in line with PLI adj. revenue growth at 13% (with 14.5% volume growth) and 13% EBITDA margin.